The effect of PEBG on respiration and oxidative phosphorilation (succinate as substrate) has been studied in liver mitochondria of rat treated with glucagon. The results obtained indicate that, while glucagon, as reported by others, induce a significant increase of respiration rate in state 3 (+ ADP), PEBG, at pharmachological dose, antagonizes this effect. The conclusion is that PEBG exertes its hypoglycemic activity by inhibiting the gluconeogenic reactions promoted by glucagon. This is strongly evident in diabetic or starwed conditions.