This study was undertaken to investigate the effect of experimental diabetes on the early steps of glucagon action. The binding of glucagon and glucagon-stimulated cyclic AMP accumulation in the presence of a potent phosphodiesterase inhibitor (IBMX, 0.1 mmol/l) were studied in liver cells isolated from control and streptozotocin-induced (65 mg/kg) diabetic rats. Comparative studies of insulin binding indicated that hepatocytes of diabetic rats bound twice as much 125I-insulin (10.8 +/- 2.0%) as those of control rats (5.7 +/- 1.3%). Scatchard analysis and the competition plots of the data suggested that this was due to an increased number of receptors rather a change in their affinity. No significant change was observed in 125I-glucagon binding of diabetic liver cells (5.8 +/- 0.5%( as compared to controls (6.8 +/- 0.4%). The number of molecules of glucagon bound to high and low affinity binding sites of control liver cells was (51 +/- 2) X 10(3) and (1300 +/- 134) X 10(3) sites/cell, respectively. The corresponding numbers in streptozotocin-treated rats were (45 +/- 5) X 10(3) and (1000 +/- 167( X 10(3) sites/cell, respectively. Cyclic AMP response to concentration of glucagon below 1 nmol/l was significantly lower in diabetics than in normals: for 0.3 nmol/l and 0.6 nmol/l of glucagon, cyclic AMP production was 48 +/- 7 pmol/10(6) cells and 78 +/- 8 pmol/10(6) cells in diabetics, as compared to 72 +/- 9 and 110 +/- 9 pmol/10(6) cells in normals. At concentrations of glucagon that are maximally efficient (greater than or equal to 7 nmol/l) cyclic AMP production was higher in diabetic (202 +/- 20 pmol/10(6) cells) than in normal rats (156 +/- 7 pmol/10(6) cells). Thus, diabetes seems to increase the quantity of adenylate cyclase and decrease its affinity for glucagon. Those changes are not related to a modification of the glucagon binding sites and are associated to an increase of insulin receptors.