The action of insulin on glucose metabolism and hepatic glucose production was studied in vivo over a wide range of insulin concentrations in lean and genetically obese (fa/fa) rats, using the euglycemic clamp technique. While total glucose metabolism was stimulated 3-fold by insulin in lean animals (half-maximal stimulation at 400 μU/ml insulin), the hormone had no significant effect on glucose metabolism in obese animals, whatever the concentration used. In lean rats, the endogenous (i.e. hepatic) glucose production was completely suppressed at a steady state insulin concentration of about 360 μU/ml. In obese rats, an insulin concentration as high as 10,000 μU/ml was needed to suppress the hepatic glucose production. These results suggest that, in obese rats 1) basal plasma insulin levels appear to maximally stimulate peripheral glucose metabolism, and the presence of postreceptor defects prevents any further stimulatory effect of the hormone on glucose metabolism; 2) grave impairments of the action of insulin on hepatic glucose production are present, despite a normal responsiveness obtained at pharmacological concentrations of the hormone. These hepatic alterations could be due to postbinding and/or intracellular defects, as well as to defects, yet to be defined, of the homeostasis of insulin counterregulatory hormones. (Endocrinobgy118: 674–678, 1986)