Updated project metadata. Inter-tissue communication is a fundamental feature of systemic metabolic regulation and the liver is central to this process. We have identified sparc-related modular calcium-binding protein 1 (SMOC1) as a glucose-responsive hepatokine and potent regulator of glucose homeostasis. Acute administration of recombinant SMOC1 improves glycemic control and insulin sensitivity, independent of changes in insulin secretion. SMOC1 exerts its favourable glycemic effects by inhibiting cAMP-PKA-CREB signaling in the liver, leading to decreased gluconeogenic gene expression and suppression of hepatic glucose output. Over expression of SMOC1 in the liver or once-weekly injections of a stabilized SMOC1-FC fusion protein induces durable improvements in glucose tolerance and insulin sensitivity in db/db mice, without significant adverse effects on adiposity, liver histopathology or inflammation. Furthermore, SMOC1 correlates with systemic insulin sensitivity and is decreased in obese, insulin resistant humans. Together, these findings identify SMOC1 as a potential pharmacological target for the management of glycemic control in type 2 diabetes.