It is widely accepted that hyperglycemia per se incites and perpetuates the diabetic state be adverse effects on β cell insulin secretion and peripheral insulin action. Examination of the latter locus has revealed glucose-related abnormalities in facilitated glucose transport. Beyond the plasma membrane, however, there is scant data examining whether hyperglycemia influences important intracellular metabolic events. We recently described a sizable reduction in post-transport, in situ metabolism in permeabilized fat cells from streptozocin-induced diabetic rats. Of importance, the diabetes-related deficit was entirely ameliorated by insulin therapy. In this study we examined whether hyperglycemia per se contributes to this altered intracellular metabolic effect. By infusing phlorizin, near euglycemia was achieved for at least four days in streptozocin-induced diabetic rats. The phlorizin-treated diabetic rats had improved (intact cell) rates of insulin-stimulated 2-deoxyglucose uptake. Despite this, permeabilized fat cell studies revealed non improvement or deterioration in diabetic intracellular metabolism as measured by both the oxidation of [6-14C]glucose-6-phosphate via the citric acid cycle or its incorporation into triglyceride. We conclude that hypoinsulinemia, and not hyperglycemia, mediates the disturbance in porous diabetic adipocyte cellular metabolism. © 1994.