Phosphoenolpyruvate carboxykinase (PEPCK) is the rate-limiting enzyme of gluconeogenesis. This metabolically important enzyme is unique in that it has no known allosteric modifiers, and all of the regulation of its activity is exerted at the level of gene expression. The expression of the PEPCK gene in liver is elevated in most forms of diabetes, and plays a major contributory role in the hyperglycemia characteristic of this disease. In this study, we initiated studies to determine the molecular basis for the increased PEPCK gene expression in diabetes. RNase protection assays of RNA isolated from control, streptozotocin-induced diabetic, and insulin-treated diabetic rat liver indicated that PEPCK mRNA levels are elevated two- to threefold in diabetic rat liver compared to controls. Nuclear run-on assays indicated that the increased PEPCK mRNA levels can be fully accounted for by changes in the transcription rate of the gene. We next initiated characterization of the cAMP response element binding protein (CREB) in diabetic rat liver, since it is known to play a major role in mediating the it is known to play a major role in mediating the basal transcriptional activity of the PEPCK gene as well as the cAMP-dependent stimulation of PEPCK gene transcription, the latter through the phosphorylation of serine 133 of CREB. Western blot analysis of nuclear lysates prepared from rat livers indicated that CREB protein levels in diabetic rat liver nuclei were similar to those of controls. However, using an antibody which specifically recognizes the serine 133-phosphorylated form of CREB, we found that the levels of phospho-CREB were significantly decreased in diabetic rat liver, an effect which insulin treatment reversed. This observation suggests that overexpression of the PEPCK gene in diabetes is not linked to the cAMP signaling system in liver.