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To determine whether somatostatin inhibits glucagon secretion directly at the pancreatic level and to study quantitatively the relative effects of somatostatin on glucagon and insulin secretion, the effects of various concentrations of somatostatin on glucagon and insulin release from the in vitro perfused rat pancreas in response to arginine (14.2 mM), isoproterenol (2 mg/ml) and theophylline (10 MM) were studied. Glucagon and insulin responses to arginine were progressively inhibited by somatostatin over a concentration range from 0.1-100 ng/ml. At all doses, somatostatin caused greater inhibition of glucagon secretion than of insulin secretion. Approximately 4 ng/ml somatostatin reduced glucagon responses 50%, whereas 90 ng/ml was required to produce comparable inhibition of insulin responses. Glucagon responses to isoproterenol, an activator of adenylate cyclase, and to theophylline, a phosphodiesterase inhibitor, were completely abolished by 100 ng/ml somatostatin. Isoproterenol did cause insulin release in this system, but insulin responses to theophylline were diminished by somatostatin. The present studies thus indicate that somatostatin is a potent inhibitor of both glucagon and insulin secretion and indicate that it acts directly on the pancreatic alpha and beta cells. Glucagon secretion is approximately 20 times more sensitive to the inhibitory effects of somatostatin than is insulin secretion. Furthermore, the present results suggest that somatostatin may act by modifying cAMP-dependent systems rather than by altering cAMP levels.