Isolated hepatocytes from hyperthyroid and euthyroid rats showed the same rate and extent of activation of glycogen synthase after addition of glucose (10 mM or 60 mM). In liver cells from hypothyroid rats this activation occurred at a 7-fold lower rate. However, complete activation of glycogen synthase occurred eventually in broken-cell preparations from either source during incubation in vitro. Glycogen synthase phosphatase was then quantitatively assayed in liver homogenates with exogenous synthase b as substrate. These assays revealed an increased synthase phosphatase activity (approximately 160%) in the hyperthyroid liver and a decreased activity (to approximately 60%) in the livers from hypothyroid rats. These activity changes involved both the cytosolic and the glycogen-bound synthase phosphatase. The increase in the activity of synthase phosphatase after the administration of T3 became maximal after 48 h. We conclude that thyroid hormones control hepatic glycogen synthesis, at least partly by an effect on synthase phosphatase.