Hypoglycaemia is a major barrier to the treatment of diabetes. Accordingly, it is important that we understand the mechanisms regulating the circulating levels of glucagon - the body's principle blood glucose-elevating hormone which is secreted from alpha-cells of the pancreatic islets. In isolated islets, varying glucose over the range of concentrations that occur physiologically between the fed and fuel-deprived states (from 8 to 4 mM) has no significant effect on glucagon secretion and yet associates with dramatic changes in plasma glucagon in vivo. The identity of the systemic factor that stimulates glucagon secretion in vivo remains unknown. Here, we show that arginine-vasopressin (AVP), secreted from the posterior pituitary, stimulates glucagon secretion. Glucagon-secreting alpha-cells express high levels of the vasopressin 1b receptor (V1bR). Activation of AVP neurons in vivo increased circulating AVP, stimulated glucagon release and evoked hyperglycaemia; effects blocked by pharmacological antagonism of either the glucagon receptor or vasopressin 1b receptor. AVP also mediates the stimulatory effects of dehydration and hypoglycaemia produced by exogenous insulin and 2-deoxy-D-glucose on glucagon secretion. We show that the A1/C1 neurons of the medulla oblongata, which are known to be activated by hypoglycaemia, drive AVP neuron activation in response to insulin-induced hypoglycaemia. Hypoglycaemia also increases circulating levels of copeptin (derived from the same pre-pro hormone as AVP) in humans and this hormone stimulates glucagon secretion from isolated human islets. In patients with type 1 diabetes, hypoglycaemia failed to increase both plasma copeptin and glucagon. These findings provide a new mechanism for the central regulation of glucagon secretion in both health and disease.