Glucose homeostasis requires an organism to rapidly respond to changes in plasma glucose concentrations. Iatrogenic hypoglycemia as a result of treatment with insulin or sulfonylureas is the most common cause of hypoglycemia in humans and is generally only seen in patients with diabetes who take these medications. The first response to a fall in glucose is the detection of impending hypoglycemia by hypoglycemia-detecting sensors, including glucose-sensing neurons in the hypothalamus and other regions. This detection is then linked to a series of neural and hormonal responses that serve to prevent the fall in blood glucose and restore euglycemia. In this review, we discuss the current state of knowledge about central glucose sensing and how detection of a fall in glucose leads to the stimulation of counterregulatory hormone and behavior responses. We also review how diabetes and recurrent hypoglycemia impact glucose sensing and counterregulation, leading to development of impaired awareness of hypoglycemia in diabetes.