Impaired suppression of glucagon levels after oral glucose or meal ingestion is a hallmark of type 2 diabetes. Whether hyperglucagonemia after a β-cell loss results from a functional upregulation of glucagon secretion or an increase in α-cell mass is yet unclear. CD-1 mice were treated with streptozotocin (STZ) or saline. Pancreatic tissue was collected after 14, 21, and 28 days and examined for α- and β-cell mass and turnover. Intraperitoneal (ip) glucose tolerance tests were performed at day 28 as well as after 12 days of subcutaneous insulin treatment, and glucose, insulin, and glucagon levels were determined. STZ treatment led to fasting and post-challenge hyperglycemia (P < 0.001 vs. controls). Insulin levels increased after glucose injection in controls (P < 0.001) but were unchanged in STZ mice (P = 0.36). Intraperitoneal glucose elicited a 63.1 ± 4.1% glucagon suppression in control mice (P < 0.001), whereas the glucagon suppression was absent in STZ mice (P = 0.47). Insulin treatment failed to normalize glucagon levels. There was a significant inverse association between insulin and glucagon levels after ip glucose ingestion (r² = 0.99). β-Cell mass was reduced by ∼75% in STZ mice compared with controls (P < 0.001), whereas α-cell mass remained unchanged (P > 0.05). α-Cell apoptosis (TUNEL) and replication (Ki67) were rather infrequently noticed, with no significant differences between the groups. These studies underline the importance of endogenous insulin for the glucose-induced suppression of glucagon secretion and suggest that the insufficient decline in glucagon levels after glucose administration in diabetes is primarily due to a functional loss of intraislet inhibition of α-cell function rather than an expansion of α-cell mass.