The antidiabetic drug metformin stimulates AMP-activated protein kinase (AMPK) activity in the liver and in skeletal muscle. To better understand the role of AMPK in the regulation of hepatic lipids, we studied the effect of metformin on AMPK and its downstream effector, acetyl-CoA carboxylase (ACC), as well as on lipid content in cultured human hepatoma HepG2 cells. Metformin increased Thr-172 phosphorylation of the alpha subunit of AMPK in a dose- and time-dependent manner. In parallel, phosphorylation of ACC at Ser-79 was increased, which was consistent with decreasing ACC activity. Intracellular triacylglycerol and cholesterol contents were also decreased. These effects of metformin were mimicked or completely abrogated by adenoviral-mediated expression of a constitutively active AMPKalpha or a kinase-inactive AMPKalpha, respectively. An insulin-resistant state was induced by exposing cells to 30 mm glucose as indicated by decreased phosphorylation of Akt and its downstream effector, glycogen synthase kinase 3alpha/beta. Under these conditions, the phosphorylation of AMPK and ACC was also decreased, and the level of hepatocellular triacylglycerols increased. The inhibition of AMPK and the accumulation of lipids caused by high glucose concentrations were prevented either by metformin or by expressing the constitutively active AMPKalpha. The kinase-inactive AMPKalpha increased lipid content and blocked the ability of metformin to decrease lipid accumulation caused by high glucose concentrations. Taken together, these results indicate that AMPKalpha negatively regulates ACC activity and hepatic lipid content. Inhibition of AMPK may contribute to lipid accumulation induced by high concentrations of glucose associated with insulin resistance. Metformin lowers hepatic lipid content by activating AMPK, thereby mediating beneficial effects in hyperglycemia and insulin resistance.