Vagal glucose receptor and arginine sensor have been found to exist in the liver of normal rats. The present study was designed to examine whether these sensory receptor systems function in streptozotocin-induced mildly diabetic rats. One week after streptozotocin injection (35 mg/kg body wt. iv), hepatic vagotomy and installation of a jugular vein catheter were performed. Three days after the surgery, intraperitoneal glucose (1 g/kg body wt.) or arginine (1 g/kg body wt.) stimulation was done with the rat in an unanesthetized and unrestrained state. Hepatic vagotomy significantly reduced glucose-induced insulin release with an increase in plasma glucose in control and diabetic rats. The rate of reduction of plasma insulin release was similar in the two groups. Hepatic vagotomy also significantly enhanced arginine-induced insulin release in both groups, but in control rats there was no change in the response to plasma glucose, while in diabetic rats there was a significant reduction. The rate of enhancement of plasma insulin release by hepatic vagotomy was significantly greater in diabetic than in control rats. The results indicate that streptozotocin-induced mildly diabetic rats have hyperfunction of the arginine sensor and normofunction of the glucose receptor and modulate insulin release through these receptor systems in the liver.