Intertissue communication is a fundamental feature of metabolic regulation, and the liver is central to this process. We have identified sparc-related modular calcium-binding protein 1 (SMOC1) as a glucose-responsive hepatokine and regulator of glucose homeostasis. Acute intraperitoneal administration of SMOC1 improved glycemic control and insulin sensitivity in mice without changes in insulin secretion. SMOC1 exerted its favorable glycemic effects by inhibiting adenosine 3',5'-cyclic monophosphate (cAMP)-cAMP-dependent protein kinase (PKA)-cAMP response element-binding protein (CREB) signaling in the liver, leading to decreased gluconeogenic gene expression and suppression of hepatic glucose output. Overexpression of SMOC1 in the liver or once-weekly intraperitoneal injections of a stabilized SMOC1-FC fusion protein induced durable improvements in glucose tolerance and insulin sensitivity in db/db mice, without adverse effects on adiposity, liver histopathology, or inflammation. Furthermore, circulating SMOC1 correlated with hepatic and systemic insulin sensitivity and was decreased in obese, insulin-resistant humans. Together, these findings identify SMOC1 as a potential pharmacological target for the management of glycemic control in type 2 diabetes.