Abstract: The severity and incidence of T2DM is directly related to hepatic lipid concentration. Even before β- cell failure ensues, the severity of non-alcoholic fatty liver disease (NAFLD) is positively associated with hyperinsulinemia and insulin resistance. The hepatic vagal nerve plays a key role in glucose homeostasis affecting both pancreatic insulin release and insulin sensitivity. Acutely eliminating hepatic afferent signaling stimulates insulin release and decreases skeletal muscle glucose clearance, simultaneously resulting in hyperinsulinemia and insulin resistance. Conversely, acutely stimulating the hepatic afferent nerve inhibits insulin release and improves glucose clearance. Until recently there was no evidence for a hepatokine that signaled to the vagal nerve to alter glucose homeostasis. We have established that hepatic lipid accumulation dose- dependently increases hepatic production and release of γ-aminobutyric acid (GABA), an inhibitory neurotransmitter. Our data proposes that hepatocyte produced GABA stimulates insulin release and decrease skeletal muscle glucose clearance by altering activity of the hepatic vagal nerve. To establish therapeutic potential, we have shown that liver GABA transaminase knockdown decreases liver GABA release, restoring insulin sensitivity and normo-insulinemia in diet-induced obese mice. Through clinical trials, we have highlighted the translational impact of potentially targeting hepatic GABA signaling. In clinical samples, we have shown that hepatic GABA-transaminase mRNA expression is positively correlated with serum insulin and HOMA-IR. In these same clinical samples, we have shown that glucose disposal during a hyperinsulinemic euglycemic clamp is positively associated with mRNA expression of GABA re-uptake transporters and negatively associated with mRNA expression of GABA exporters. We propose 3 Aims focused on our central hypothesis that GABA is a hepatokine that can help explain the link between hepatic lipid accumulation and hyperinsulinemia and insulin resistance in obesity. Aim 1: Assess how obesity, lipids, diacylglycerol, ceramides, and downstream signaling affect direction of flux through the GABA shunt and transport of GABA across the plasma membrane. Aim 2: Assess the glucoregulatory response to exacerbating hepatic GABA production in lean mice or limiting hepatic GABA production in obese mice. Aim 3: Assess the glucoregulatory response to knockout (loss) and adenoviral induced overexpression (gain) of hepatic GABA transporters in lean and diet-induced obese mice. Impact: Validation of GABA as a novel hepatokine that affects serum insulin and insulin sensitivity in obesity will provide new therapeutic targets to treat this disease.