Second generation antipsychotic drugs used to treat schizophrenia have been reported to induce weight gain and a Type-2 diabetes like syndrome in humans. Evidence indicates that these drugs induce this syndrome by promoting insulin resistance in peripheral tissues. However, supra-physiological levels of the drugs are required to cause this insulin resistance in model systems. Here we have investigated the effects of therapeutically relevant levels of 3 different antipsychotic medications (Haloperidol, Quetiapine and Clozapine) on glucose metabolism. We find that at these concentrations antipsychotic drugs do induce impaired glucose tolerance in rats which is associated with increased insulin secretion, but independent of weight gain (Clozapine>Quetiapine>Haloperidol). However, activation of Akt/PKB is normal and at these levels of drug there was no major effect on insulin action in fat cells. This suggested that the drugs were not inducing insulin resistance per se. Instead we show that the drugs stimulated hepatic glucose production, and the effect is at least in part mediated by a stimulation of glucagon secretion. We also find that the increased glucose production is responsible for increased insulin secretion and that blocking insulin secretion attenuates the activation of the enzyme Akt/protein kinase B in the hippocampus. This data provides new information on the mechanisms by which second generation antipsychotic drugs regulate glucose metabolism. Thus, the glucose production and the subsequent insulin release may form part of the therapeutic actions of the drugs by acting to restore defective Akt/PKB signalling that is associated with schizophrenia.