Insulin resistance and a defective insulin activation of the enzyme glycogen synthase in skeletal muscle during euglycaemia may have important pathophysiological implications in Type 2 (non-insulin-dependent) diabetes mellitus. Hyperglycaemia may serve to compensate for these defects in Type 2 diabetes by increasing glucose disposal through a mass action effect. In the present study, rates of whole-body glucose oxidation and glucose storage were measured during fasting hyperglycaemia and isoglycaemic insulin infusion (40 mU.m-2.min-1, 3 h) in 12 patients with Type 2 diabetes. Eleven control subjects were studied during euglycaemia. Biopsies were taken from the vastus lateralis muscle. Fasting and insulin-stimulated glucose oxidation, glucose storage and muscle glycogen synthase activation were all fully compensated (normalized) during hyperglycaemia in the diabetic patients. The insulin-stimulated increase in muscle glycogen content was the same in the diabetic patients and in the control subjects. Besides hyperglycaemia, the diabetic patients had elevated muscle free glucose and glucose 6-phosphate concentrations. A positive correlation was demonstrated between intracellular free glucose concentration and muscle glycogen synthase fractional velocity insulin activation (0.1 mmol/l glucose 6-phosphate: r = 0.65, p less than 0.02 and 0.0 mmol/l glucose 6-phosphate: r = 0.91, p less than 0.0001). In conclusion, this study indicates an important role for hyperglycaemia and elevated muscle free glucose and glucose 6-phosphate concentrations in compensating (normalizing) intracellular glucose metabolism and skeletal muscle glycogen synthase activation in Type 2 diabetes.