Chronic hyperglycemia contributes to the development of diabetes-associated complications. Increases in the concentration of circulating glucose activate the hexosamine biosynthetic pathway (HBP) and promote the O-glycosylation of proteins by O-glycosyl transferase (OGT). We show that OGT triggered hepatic gluconeogenesis through the O-glycosylation of the transducer of regulated cyclic adenosine monophosphate response element-binding protein (CREB) 2 (TORC2 or CRTC2). CRTC2 was O-glycosylated at sites that normally sequester CRTC2 in the cytoplasm through a phosphorylation-dependent mechanism. Decreasing amounts of O-glycosylated CRTC2 by expression of the deglycosylating enzyme O-GlcNAcase blocked effects of glucose on gluconeogenesis, demonstrating the importance of the HBP in the development of glucose intolerance.