Glucagon, the counter-regulatory hormone to insulin, is secreted from pancreatic α cells in response to low blood glucose. To examine the role of glucagon in glucose homeostasis, mice were generated with a null mutation of the glucagon receptor (Gcgr −/− ). These mice display lower blood glucose levels throughout the day and improved glucose tolerance but similar insulin levels compared with control animals. Gcgr −/− mice displayed supraphysiological glucagon levels associated with postnatal enlargement of the pancreas and hyperplasia of islets due predominantly to α cell, and to a lesser extent, δ cell proliferation. In addition, increased proglucagon expression and processing resulted in increased pancreatic glucogen-like peptide 1 (GLP-1) (1–37) and GLP-1 amide (1–36 amide) content and a 3- to 10-fold increase in circulating GLP-1 amide. Gcgr −/− mice also displayed reduced adiposity and leptin levels but normal body weight, food intake, and energy expenditure. These data indicate that glucagon is essential for maintenance of normal glycemia and postnatal regulation of islet and α and δ cell numbers. Furthermore, the lean phenotype of Gcgr −/− mice suggests glucagon action may be involved in the regulation of whole body composition.