The uptake and metabolism of propionate in the isolated perfused caudal lobe of the liver and in isolated hepatocytes were examined following treatment of sheep with glucagon or saline. Glucagon or sterile saline was infused at 9·8 µg/min for 3 h into the jugular vein and then the caudal lobe of the liver was removed surgically under anaesthesia. The caudal lobe was used either to prepare hepatocytes or in a non-recirculating perfusion experiment. Uptake and metabolism of propionate were studied using [2-14C]propionate. In studies using the non-recirculation perfusion of the caudal lobe of the sheep liver it was shown that the treatment of sheep with glucagon resulted in an increased rate of gluconeogenesis from propionate and in an increased net uptake of propionate by the caudal lobe. The uptake of propionate into the hepatocytes was saturable, concentrative and exhibited a Km for propionate of 0·24 (SE 0·07) mM and a maximal rate of uptake (Vmax) of 6·7 (SE 0·6) nmol/mg dry cells per min and was unaffected by glucagon treatment of sheep. After incubation of cells in medium containing 0·5 mM-[2-14C]propionate for 10 min, the rate of gluconeogenesis from propionate was 22 % higher in the hepatocytes isolated from glucagon-treated sheep. Concentrations in the medium of 1·35 mM butyrate and 1 mM-caproate inhibited propionate uptake by about 50 % and abolished the glucagon-induced stimulation of gluconeogenesis from propionate. The results are consistent with a regulatory role for glucagon in the gluconeogenesis from propionate in the sheep liver.