The aim of this study was to understand by which intrahepatic mechanism metformin (Met) may inhibit basal hepatic glucose production (HGP) in type 2 diabetes. We studied rats that were fed for 6 weeks a high-fat (HF) diet, supplemented (HF-Met) or not (HF) with Met (50 mg · kg⁻¹ · day⁻¹). Basal HGP, assessed by 3-[³H]glucose tracer dilution, was lower by 20% in HF-Met rats compared with HF-rats: 41.6 ± 0.7 vs. 52 ± 1.5 μmol · kg⁻¹ · min⁻¹ (means ± SE, n = 5; P < 0.01). Glucose-6 phosphatase (Glc6Pase) activity, assayed in a liver lobe freeze-clamped in situ, was lower by 25% in HF-Met rats compared with HF-rats (7.9 ± 0.4 vs. 10.3 ± 0.9 μmol · min⁻¹ · g⁻¹ wet liver; P < 0.05). Glucose-6 phosphate and glycogen contents, e.g., 42 ± 5 nmol/g and 3.9 ± 2.4 mg/g, respectively, in HF-rats were dramatically increased by three to five times in HF-Met rats, e.g., 118 ± 12 nmol/g and 19.6 ± 4.6 mg/g (P < 0.05 and P < 0.01, respectively). Glucose-6 phosphate dehydrogenase activity was increased in HF-Met compared with HF rats (1.51 ± 0.1 vs. 1.06 ± 0.08 μmol · min⁻¹ · g⁻¹; P < 0.01). Intrahepatic lactate concentration tended to be lower in the Met-group (−30%; NS), whereas plasma lactate concentration was higher in HF-Met rats (1.59 ± 0.15 mmol/l) than in HF rats (1.06 ± 0.06 mmol/l; P < 0.05). We concluded that Met decreases HGP in insulin-resistant HF-fed rats mainly by an inhibition of hepatic Glc6Pase activity, promoting glycogen sparing. Additional mechanisms might involve the diversion of glucose-6 phosphate into the pentose phosphate pathway and an inhibition of hepatic lactate uptake.