Increased glucose production is associated with fasting hyperglycaemia in type 2 diabetes but whether or not it causes glucose intolerance is unclear. This study sought to determine whether a primary defect in gluconeogenesis (GNG) resulting in elevated glucose production is sufficient to induce glucose intolerance in the absence of insulin resistance and impaired insulin secretion. Progression of glucose intolerance was assessed in phosphoenolpyruvate carboxykinase (PEPCK) transgenic rats, a genetic model with a primary increase in GNG. Young (4-5 weeks of age) and adult (12-14 weeks of age) PEPCK transgenic and Piebald Virol Glaxo (PVG/c) control rats were studied. GNG, insulin sensitivity, insulin secretion and glucose tolerance were assessed by intraperitoneal and intravascular substrate tolerance tests and hyperinsulinaemic/euglycaemic clamps. Despite elevated GNG and increased glucose appearance, PEPCK transgenic rats displayed normal glucose tolerance due to adequate glucose disposal and robust glucose-mediated insulin secretion. Glucose intolerance only became apparent in the PEPCK transgenic rats following the development of insulin resistance (both hepatic and peripheral) and defective glucose-mediated insulin secretion. Taken together, a single genetic defect in GNG leading to increased glucose production does not adversely affect glucose tolerance. Insulin resistance and impaired glucose-mediated insulin secretion are required to precipitate glucose intolerance in a setting of chronic glucose oversupply.