Inhibition of glycogen phosphorylase (GP) has attracted considerable attention during the last five to 10 years as a means of treating the elevated hepatic glucose production seen in patients with type 2 diabetes. Several different GP inhibitors binding to various binding sites of the GP enzyme have been reported in the literature. In this paper we report on a novel class of compounds that have been identified as potent GP inhibitors. Their synthesis, mode of binding to the allosteric AMP site as well as in vitro data on GP inhibition are shown. The most potent inhibitor was found to be 4-[2,4-bis-(3-nitrobenzoylamino)phenoxy]phthalic acid (4j) with an IC(50) value of 74 nM. This compound together with a closely related analogue was further characterized by enzyme kinetics and in primary rat hepatocytes.