Suppression of GABAergic neurotransmission in the ventromedial hypothalamus (VMH) is crucial for full activation of counterregulatory responses to hypoglycemia, and increased γ-aminobutyric acid (GABA) output contributes to counterregulatory failure in recurrently hypoglycemic (RH) and diabetic rats. The goal of this study was to establish whether lactate contributes to raising VMH GABA levels in these two conditions. We used microdialysis to deliver artificial extracellular fluid or L-lactate into the VMH and sample for GABA. We then microinjected a GABAA receptor antagonist, an inhibitor of lactate transport (4CIN), or an inhibitor of lactate dehydrogenase, oxamate (OX), into the VMH prior to inducing hypoglycemia. To assess whether lactate contributes to raising GABA in RH and diabetes, we injected 4CIN or OX into the VMH of RH and diabetic rats before inducing hypoglycemia. L-lactate raised VMH GABA levels and suppressed counterregulatory responses to hypoglycemia. While blocking GABAA receptors did not prevent the lactate-induced rise in GABA, inhibition of lactate transport or utilization did, despite the presence of lactate. All three treatments restored the counterregulatory responses, suggesting that lactate suppresses these responses by enhancing GABA release. Both RH and diabetic rats had higher baseline GABA levels and were unable to reduce GABA levels sufficiently to fully activate counterregulatory responses during hypoglycemia. 4CIN or OX lowered VMH GABA levels in both RH and diabetic rats and restored the counterregulatory responses. Lactate likely contributes to counterregulatory failure in RH and diabetes by increasing VMH GABA levels.