Fibroblast growth factor 21 (FGF21) is a novel metabolic regulator shown to improve glycemic control. However, the molecular and functional mechanisms underlying FGF21-mediated improvements in glycemic control are not completely understood. We examined FGF21 effects on insulin sensitivity and glucose fluxes upon chronic (daily injection for 8 d) and acute (6 h infusion) administration in ob/+ and ob/ob mice. Results show that chronic FGF21 ameliorated fasting hyperglycemia in ob/ob mice via increased glucose disposal and improved hepatic insulin sensitivity. Acute FGF21 suppressed hepatic glucose production, increased liver glycogen, lowered glucagon, and improved glucose clearance in ob/+ mice. These effects were blunted in ob/ob mice. Neither chronic nor acute FGF21 altered skeletal muscle or adipose tissue glucose uptake in either genotype. In conclusion, FGF21 has potent glycemic effects caused by hepatic changes in glucose flux and improved insulin sensitivity. Thus, these studies define mechanisms underlying anti-hyperglycemic actions of FGF21 and support its therapeutic potential.