The pathophysiological mechanisms to explain the association between risk of type 2 diabetes and elevated concentrations of gamma-glutamyltransferase (GGT) and alanineaminotransferase (ALT) remain poorly characterized. We explored the association of liver enzymes with peripheral and hepatic insulin resistance, insulin secretion, insulin clearance, and glucagon concentration. We studied 1,309 nondiabetic individuals from the Relationship between Insulin Sensitivity and Cardiovascular disease (RISC) study; all had a euglycemic-hyperinsulinemic clamp and an oral glucose tolerance test (OGTT) with assessment of insulin secretion and hepatic insulin extraction. The hepatic insulin resistance index was calculated in 393 individuals. In both men and women, plasma concentrations of GGT and ALT were inversely related with insulin sensitivity (M/I) (all P < 0.01). Likewise, the hepatic insulin resistance index was positively correlated with both GGT (r ΒΌ 0.37, P < 0.0001, men; r ΒΌ 0.36, P < 0.0001, women) and ALT (r ΒΌ 0.25, P ΒΌ 0.0005, men; r -0.18, P ΒΌ 0.01, women). These associations persisted in multivariable models. Increased GGT and ALT were significantly associated with higher insulin secretion rates and with both reduced endogenous clearance of insulin and hepatic insulin extraction during the OGTT (P ΒΌ 0.0005 in men; P ΒΌ 0.003 in women). Plasma fasting glucagon levels increased over ALT quartiles (men, quartile 4 vs. 1 11.2 ΓΎ/Γ 5.1 vs. 9.3 ΓΎ/Γ 3.8 pmol/L, respectively, P ΒΌ 0.0002; women, 9.0 ΓΎ/Γ 4.3 vs. 7.6 ΓΎ/Γ 3.1, P ΒΌ 0.001). In healthy individuals, increased GGT and ALT were biomarkers of both systemic and hepatic insulin resistance with concomitant increased insulin secretion and decreased hepatic insulin clearance. The novel finding of a positive correlation between ALT and fasting glucagon level concentrations warrants confirmation in type 2 diabetes.