In pregnancies complicated by diabetes, hyperglycemia and lipid metabolism alterations are associated with both maternal and fetal complications. However the mechanism of metabolic alterations in mothers that contribute to hyperglycemia and hyperlipidemia is not fully understood. In the present study we investigated the mechanisms underlying hyperglycemia and hypertriglyceridemia in gestational diabetes using a rat model. Diabetes was induced in virgin rats by the administration of 50 mg Streptozotocin (STZ) i.p. After the STZ injection, the animals were mated. On the 19th day of pregnancy all the rats were laparotomised after withdrawal of blood by cardiac puncture. Blood was used for the determination of insulin, glucose, cholesterol. Liver and pancreas were removed and used for biochemical assays and light microscopy. Plasma glucose, cholesterol and insulin were significantly higher in the diabetic rats as compared with control. The mRNA expressions of the rate limiting gluconeogenic enzymes PEPCK and Glucose 6 phosphatase and de novo lipogenic enzymes acetyl CoA carboxylase and fatty acid synthase were higher in the livers of diabetic rats. The protein level and activity of GK was decreased in the livers of diabetic rats. The results of the present study suggest that hyperglycemia observed in diabetic pregnant rats may be due to increased gluconeogenesis, increased glucose output and decreased glucose uptake by the liver. Hyperlipidemia may be due to increased de novo lipid synthesis in the liver.