Glucagon maintains glucose homeostasis during the fasting state by promoting hepatic gluconeogenesis and glycogenolysis. Hyperglucagonemia and/or an elevated glucagon-to-insulin ratio have been reported in diabetic patients and animals. Antagonizing the glucagon receptor is expected to result in reduced hepatic glucose overproduction, leading to overall glycemic control. Here we report the discovery and characterization of compound 1 (Cpd 1), a compound that inhibits binding of 125I-labeled glucagon to the human glucagon receptor with a half-maximal inhibitory concentration value of 181 +/- 10 nmol/l. In CHO cells overexpressing the human glucagon receptor, Cpd 1 increased the half-maximal effect for glucagon stimulation of adenylyl cyclase with a KDB of 81 +/- 11 nmol/l. In addition, Cpd 1 blocked glucagon-mediated glycogenolysis in primary human hepatocytes. In contrast, a structurally related analog (Cpd 2) was not effective in blocking glucagon-mediated biological effects. Real-time measurement of glycogen synthesis and breakdown in perfused mouse liver showed that Cpd 1 is capable of blocking glucagon-induced glycogenolysis in a dosage-dependent manner. Finally, when dosed in humanized mice, Cpd 1 blocked the rise of glucose levels observed after intraperitoneal administration of exogenous glucagon. Taken together, these data suggest that Cpd 1 is a potent glucagon receptor antagonist that has the capability to block the effects of glucagon in vivo.