In the kidney, conversion of cortisol to cortisone by the enzyme 11 beta-hydroxysteroid dehydrogenase protects mineralocorticoid receptors from cortisol. In the liver, a different isoform of the enzyme favors 11 beta-reductase conversion of cortisone to cortisol. We have tested the hypothesis that hepatic 11 beta-reductase enhances glucocorticoid receptor activation in the liver by inhibiting the enzyme with carbenoxolone and observing effects on insulin sensitivity. Seven healthy males took part in a double blind randomized cross-over study in which oral carbenoxolone (100 mg every 8 h) or placebo was administered for 7 days. Euglycemic hyperinsulinemic clamp studies were then performed, including measurement of forearm glucose uptake. Carbenoxolone increased whole body insulin sensitivity (M values for dextrose infusion rates, 41.1 +/- 2.4 mumol/kg.min for placebo vs. 44.6 +/- 2.3 for carbenoxolone; P < 0.03), but had no effect on forearm insulin sensitivity. We infer that carbenoxolone, by inhibiting hepatic 11 beta-reductase and reducing intrahepatic cortisol concentration, increases hepatic insulin sensitivity and decreases glucose production. Thus, plasma cortisone provides an inactive pool that can be converted to active glucocorticoids at sites where 11 beta-reductase is expressed, abnormal hepatic 11 beta-reductase activity might be important in syndromes of insulin resistance, and manipulation of hepatic 11 beta-reductase may be useful in treating insulin resistance.