Islet damage from glucose toxicity is implicated in the pathogenesis of type 2 diabetes, but the sequence of events leading to islet cell dysfunction and hyperglycemia remains unclear. To examine the early stages of islet pathology resulting from increased basal glucose loads, normal awake rats were infused with glucose continuously for 10 days. Plasma glucose and markers of islet and liver function were monitored throughout the infusion. After initial hyperglycemia, rats adapted to the infusion and maintained euglycemia for approximately 4 days. Continued infusion led to worsening hyperglycemia in just 5% of rats after 6 days, but 69% after 8 days and 89% after 10 days, despite unchanged basal and stimulated plasma insulin and C-peptide concentrations. In contrast, plasma glucagon concentrations increased fivefold. Endogenous glucose production (EGP) was appropriately suppressed after 4 days (2.8 ± 0.7 vs. 6.1 ± 0.4 mg·kg(-1)·min(-1) on day 0, P < 0.001) but tripled between days 4 and 8 (9.9 ± 1.7 mg·kg(-1)·min(-1), P < 0.01). Surprisingly, the increase in EGP was accompanied by increased mitochondrial phosphoenolpyruvate carboxykinase expression with appropriate suppression of the cytosolic isoform. Infusion of anti-glucagon antibodies normalized plasma glucose to levels identical to those on day 4 and ∼300 mg/dl lower than controls. This improved glycemia was associated with a 60% reduction in EGP. These data support the novel concept that glucose toxicity may first manifest as α-cell dysfunction prior to any measurable deficit in insulin secretion. Such hyperglucagonemia could lead to excessive glucose production overwhelming the capacity of the β-cell to maintain glucose homeostasis.