Impaired suppression of plasma nonesterified fatty acids (NEFAs) after glucose ingestion may contribute to glucose intolerance, but the mechanisms are unclear. Evidence that insulin inhibits hepatic glucose output (HGO), in part by suppressing plasma NEFA levels, suggests that impaired suppression of plasma NEFA after glucose ingestion would impair HGO suppression and increase the systemic delivery of glucose. To test this hypothesis, we studied glucose kinetics (constant intravenous [3-H]glucose [0.4 μCi/min], oral [1-¹⁴C]glucose [100 μCi]), whole-body substrate oxidation, and leg glucose uptake in eight normal subjects (age, 39 ± 9 years [mean ± SD]; BMI, 24 ± 2 kg/m²) in response to 75 g oral glucose on two occasions. In one study, plasma NEFAs were prevented from falling by infusion of 20% Liposyn (45 ml/h) and heparin (750 U/h). Plasma glucose rose more rapidly during lipid infusion (P < 0.05), and mean levels tended to be higher after 120 min (6.45 ± 0.41 vs. 5.81 ± 0.25 SE, 0.1 < P < 0.05, NS); peak glucose levels were similar. Total glucose appearance (R_a) was higher during lipid infusion due to a higher HGO (28.4 ± 1.0 vs. 21.2 ± 1.5 g over 4 h, P < 0.005). Total glucose disposal CR_d) was also higher (88 ± 2 vs. 81 ± 3 g in 4 h, P < 0.05). Plasma insulin rose more rapidly after glucose ingestion with lipid infusion, and leg glucose uptake was 33% higher (P < 0.05) during the 1st hour. During lipid infusion, subjects oxidized less glucose (47 ± 3 vs. 55 ± 2 g, P < 0.05) and more fat (7.1 ± 0.8 vs. 3.9 ± 0.9 g, P < 0.02). In summary, 1) impaired suppression of NEFAs after oral glucose impairs insulin's ability to suppress HGO, and 2) in normal subjects the greater insulin response compensates for the increased systemic glucose delivery by increasing peripheral glucose R_d.