There is increasing evidence for the existence of intrahepatic regulation of glucose metabolism by Kupffer cell products. Nitric oxide (NO) is known to inhibit gluconeogenic flux through pyruvate carboxylase and phosphoenolpyruvate carboxykinase. However, NO may also influence glucose metabolism at other levels. Using hepatocytes from fasted rats incubated with the NO-donor S-nitroso-N-acetylpenicillamine, we have now found that the synthesis of glycogen from glucose is even more sensitive to inhibition by NO than gluconeogenesis. Inhibition of glycogen production by NO was accompanied by a rise in intracellular glucose 6-phosphate and UDPglucose. Activity of glycogen synthase, as measured in extracts of hepatocytes after the cells had been exposed to NO, was decreased. Experiments with gel-filtered liver extracts revealed that inhibition of glycogen synthase was caused by an inhibitory effect of NO on the conversion of glycogen synthase b into glycogen synthase a.