The role of glucagon in glucose homeostasis during chronic malnutrition was studied in weaning-littermate rats either fed ad libitum or restricted to 60% of ad libitum intake for 8 weeks. Fasting glucose and insulin levels were lower in malnourished rats, and their response to glucagon (0.02 mg/kg intravenous [IV]) after a 16-hour fast was significantly less than in control littermates for both glucose ( P = .039) and insulin ( P = .008). During euglycemic glucose clamp studies at identical plasma glucose (PG) levels, insulin suppression of hepatic glucose production (HGP) was impaired in malnourished rats, indicating insulin resistance (mean ± SE HGP: 48 ± 5 v 32 ± 10 μmol · kg −1 · min −1 for controls, P = .028). Glucose disposal was not significantly different in the two groups. However, after IV glucagon, the increase in HGP was markedly impaired in malnourished rats ( P = .0004), with the total amount of glucose produced by the liver over 15 minutes being 1,397 ± 114 μmol/kg as compared with 2,031 ± 118 in controls ( P = .0047). The impaired response was not due to defective glycogenolysis, because the release of glucose from prelabeled glycogen in response to glucagon injection contributed only 6% to 8% of the overall increase in glucose output from the liver, and was not different in the two groups. Furthermore, liver glycogen stores were virtually exhausted after the 16-hour fast, without glucagon injection. Glucagon receptor affinity and number were not affected by malnutrition. It is concluded that (1) chronic malnutrition is associated with hepatic resistance to both insulin and glucagon, (2) the glucagon resistance is not due to impaired glycogenolysis, and (3) it is mediated by a postreceptor defect. It is proposed that resistance to glucagon stimulation of gluconeogenesis is an adaptive response that helps conserve protein at the expense of a lower PG level in chronic malnutrition. The risk of hypoglycemia is partially offset by the insulin deficiency and resistance, which are other elements of this adaptive response.