The ability of an inositol phosphate-glycan (IPG) to mimic the effects of insulin on regulation of the expression of specific mRNAs was studied in isolated hepatocytes from normal and diabetic rats. Incubation of normal liver cells with IPG (10 microM) during 90 min produced a 5-fold decrease in phosphoenolpyruvate carboxykinase (PEPCK) mRNA levels, which had been previously increased about 10-fold by incubation with 8-bromo-cAMP (0.1 mM). The effect of IPG was dose dependent and could not be reproduced by galactose, glucosamine, or myo-inositol. IPG reduction of PEPCK mRNA is primarily due to a decrease in the rate of transcription of the gene, as judged by nuclear run-on transcription experiments performed in rat hepatoma H4IIE cells. In hepatocytes isolated from diabetic rats, treatment with 5 microM IPG for 15 min caused a 4-fold induction in the expression of alpha 2-microglobulin mRNA concomitantly with a 2.5-fold decrease in the level of PEPCK mRNA. Cleavage of IPG with nitrous acid abolished both the increase and the decrease in specific mRNAs levels. Glycosyl-phosphatidylinositol, the lipid precursor of IPG, did not modify either PEPCK or alpha 2-microglobulin mRNA levels. These data indicate that both positive and negative effects of insulin on the regulation of gene expression are mimicked by IPG.