The Peutz-Jegher syndrome tumor-suppressor gene encodes a protein-threonine kinase, LKB1, which phosphorylates and activates AMPK [adenosine monophosphate (AMP)-activated protein kinase]. The deletion of LKB1 in the liver of adult mice resulted in a nearly complete loss of AMPK activity. Loss of LKB1 function resulted in hyperglycemia with increased gluconeogenic and lipogenic gene expression. In LKB1-deficient livers, TORC2, a transcriptional coactivator of CREB (cAMP response element-binding protein), was dephosphorylated and entered the nucleus, driving the expression of peroxisome proliferator-activated receptor-gamma coactivator 1alpha (PGC-1alpha), which in turn drives gluconeogenesis. Adenoviral small hairpin RNA (shRNA) for TORC2 reduced PGC-1alpha expression and normalized blood glucose levels in mice with deleted liver LKB1, indicating that TORC2 is a critical target of LKB1/AMPK signals in the regulation of gluconeogenesis. Finally, we show that metformin, one of the most widely prescribed type 2 diabetes therapeutics, requires LKB1 in the liver to lower blood glucose levels.