Type 2 diabetes is characterised by elevated blood glucose concentrations, which potentially could be normalised by stimulation of hepatic glycogen synthesis. Under glycogenolytic conditions, the interaction of hepatic glycogen-associated protein phosphatase-1 (PP1-G(L)) with glycogen phosphorylase a is believed to inhibit the dephosphorylation and activation of glycogen synthase (GS) by the PP1-G(L) complex, suppressing glycogen synthesis. Consequently, the interaction of G(L) with phosphorylase a has emerged as an attractive anti-diabetic target, pharmacological disruption of which could provide a novel mechanism to lower blood glucose levels by increasing hepatic glycogen synthesis. Here we report for the first time the in vivo consequences of disrupting the G(L)-phosphorylase a interaction, using a mouse model containing a Tyr284Phe substitution in the phosphorylase a-binding region of the G(L) protein. The resulting G(L)(Y284F/Y284F) mice display hepatic PP1-G(L) activity that is no longer sensitive to allosteric inhibition by phosphorylase a, resulting in increased GS activity under glycogenolytic conditions, demonstrating that regulation of G(L) by phosphorylase a operates in vivo. G(L)(Y284F/Y284F) and G(L)(Y284F/+) mice display improved glucose tolerance compared with G(L)(+/+) littermates, without significant accumulation of hepatic glycogen. The data provide the first in vivo evidence in support of targeting the G(L)-phosphorylase a interaction for treatment of hyperglycaemia. During prolonged fasting the G(L)(Y284F/Y284F) mice lose more body weight and display decreased blood glucose levels in comparison with their G(L)(+/+) littermates. These results suggest that, during periods of food deprivation, the phosphorylase a regulation of G(L) may prevent futile glucose-glycogen cycling, preserving energy and thus providing a selective biological advantage that may explain the observed conservation of the allosteric regulation of PP1-G(L) by phosphorylase a in mammals.