Primary cultures of rat hepatocytes were utilized to study insulin resistance in the liver of nonketotic streptozotocin diabetic animals. Normal control and 72-hr fasted animals were also studied for comparison. Basal lipogenesis in primary cultures of hepatocytes from fasted rats is 47% of that in hepatocytes from normal animals and is resistant to the acute effects of insulin. In contrast, the lipogenic response to the chronic (20 hr) exposure to insulin is the same as that of primary cultures of hepatocytes from normal rats. In addition, the acute responsiveness to insulin is restored to normal when primary cultures are incubated for 20 hr with 10 −9M insulin. Basal lipogenesis in primary cultures of hepatocytes from diabetic rats is only 20% of that in hepatocytes from normal control animals and is resistent to both the acute and chronic exposure to insulin. Furthermore, hepatocytes from diabetic animals cultured for 20 hr in the presence of insulin (10 −9M) remain resistant to the acute effects of insulin on lipid synthesis. Insulin administration to diabetic rats, however, markedly enhances both basal and insulin responsive lipogenesis in subsequently cultured hepatocytes. The chronic (20 hr) exposure to glucose, fructose, glycerol, pyruvate, and acetate has no enhancing effect on the rate of lipid synthesis and insulin responsiveness in primary cultures from diabetic rats. This was true whether lipid synthesis was evaluated from ( 14C)-acetate or 3H 2O. The present studies demonstrate that neither insulin, a variety of glycolytic intermediates, nor a combination of the two leads to a recovery of lipogenesis or insulin responsiveness in primary cultures of hepatocytes from diabetic animals. The data suggest that in vivo factors other than insulin are important in the recovery of lipogenesis and insulin responsiveness in the liver of diabetic animals.