To investigate the potential of therapies which reduce glucocorticoid action in patients with Type 2 diabetes we performed a randomized, double-blinded, placebo-controlled crossover study of acute glucocorticoid blockade, using the glucocorticoid receptor antagonist RU38486 (mifepristone) and cortisol biosynthesis inhibitor (metyrapone), in 14 men with Type 2 diabetes. Stable isotope dilution methodologies were used to measure the rates of appearance of glucose, glycerol, and free fatty acids (FFAs), including during a low-dose (10 mU.m(-)(2) .min(-)(1)) hyperinsulinemic clamp, and subgroup analysis was conducted in patients with high or low liver fat content measured by magnetic resonance spectroscopy (n = 7/group). Glucocorticoid blockade lowered fasting glucose and insulin levels and improved insulin sensitivity of FFA and glycerol turnover and hepatic glucose production. Among this population with Type 2 diabetes high liver fat was associated with hyperinsulinemia, higher fasting glucose levels, peripheral and hepatic insulin resistance, and impaired suppression of FFA oxidation and FFA and glycerol turnover during hyperinsulinemia. Glucocorticoid blockade had similar effects in those with and without high liver fat. Longer term treatments targeting glucocorticoid action may be useful in Type 2 diabetes with and without fatty liver.