A method is described for the isolation of viable hepatocytes from sheep liver. The characteristics of insulin and glucagon binding to the cells were investigated by the use of mono-iodinated hormone, and from these data the optimum in-vitro incubation conditions for hormone-receptor binding were established. Glucagon and insulin receptors were examined in relation to plasma concentrations of hormones and metabolites in non-mated, and 20- and 50-day-lactating ewes (six animals/group). Measurements of insulin, growth hormone and non-esterified fatty acids in the circulation, together with a fall in body weight, suggested that at peak lactation (20 days) the ewes were in energy-deficit and were mobilizing body tissue. The percentage binding of insulin was higher in hepatocytes after 50 days of lactation when compared with that in both the unmated (P < 0·05) and 20-day-lactating animals. No changes in insulin binding were found between the unmated and 20-day-lactating groups. Glucagon binding was reduced in the 20- (P < 0·02) and increased in the 50-day-lactating group (P < 0·001) when compared with the unmated control animals. The binding of glucagon was higher at 50 days as compared with 20 days of lactation (P < 0·001). The changes in insulin binding resulted primarily from altered receptor numbers whereas changes in the binding of glucagon were due to alterations in both receptor numbers and affinity. Our results indicated that the binding of insulin and glucagon to isolated hepatocytes was altered during lactation in sheep and that these changes might modulate the sensitivity of the cells to the actions of the hormones.