The aim of the study was to investigate the impact of hyperthyroidism on the characteristics of the islet insulin secretory response to glucose, particularly the consequences of competition between thyroid hormone and PPAR in the regulation of islet adaptations to starvation and dietary lipid-induced insulin resistance. Rats maintained on standard (low-fat/high-carbohydrate) diet or high-fat/low-carbohydrate diet were rendered hyperthyroid (HT) by T3 administration (1 mg/kg body weight per day; s.c., 3 days). The PPAR agonist WY14,643 (50 mg/kg body wt.; i.p.) was administered 24 h before sampling. Glucose-stimulated insulin secretion (GSIS) was assessed during hyperglycemic clamps or after acute glucose bolus injection in vivo, and using step-up and step-down islet perifusions. Hyperthyroidism decreased the glucose responsiveness of GSIS, precluding sufficient enhancement of insulin secretion for the degree of insulin resistance, in rats fed either standard diet or high-fat diet. Hyperthyroidism partially opposed the starvation-induced increase in the glucose threshold for GSIS and decrease in glucose responsiveness. WY14,643 administration restored glucose tolerance by enhancing GSIS in fed hyperthyroid rats, and relieved the impact of hyperthyroidism to partially oppose islet starvation adaptations. Competition between TR and PPAR influences the characteristics of GSIS, such that hyperthyroidism impairs GSIS while PPAR activation (and increased dietary lipid) opposes TR signalling and restores GSIS in the fed hyperthyroid state. Increased islet PPAR signalling and decreased TR signalling during starvation facilitates appropriate modification of islet function.