High blood sugar, insulin resistance, or high fasting blood glucose may all be caused by high T3 levels. Many on the T3-only protocol or high doses of desiccated thyroid notice their blood sugar levels rising and wonder why. It’s because thyroid levels, either too high or too low, have a direct impact on blood glucose.
Hypothyroidism may cause high blood sugar & insulin resistance
A1C levels of hypothyroid patients are generally higher than normal, and in one study, replacement with thyroid hormone brought the A1C down, but it did not lower fasting blood glucose.  A1C is a measure of average blood glucose levels over several months. This study shows that the hypothyroid condition will cause an overall higher average blood glucose than normal.
Insulin resistance appears when thyroid levels are too low or too high.  Correcting the hypothyroid state is beneficial, but replacement with too much thyroid hormone may result in continued insulin resistance.
A low T3/T4 ratio was found in pre-diabetics who had both high insulin levels and insulin resistance. These subjects had lower T3 levels and higher T4 levels than normal, glucose-tolerant subjects. This study confirms that a certain level of T3 is essential for normal glucose metabolism.
SHBG (Sex Hormone Binding Globulin) is secreted by the liver and is positively correlated with thyroid levels—it rises when hyperthyroid and falls when hypothyroid. Low levels therefore suggest a hypothyroid condition. Low SHBG is also a biomarker of insulin resistance, metabolic syndrome, and a risk factor for developing high blood sugar and type 2 diabetes, especially in women. 
High T3 & High T4 may cause high blood sugar and insulin resistance
Blood sugar problems may be caused by high thyroid levels. The following are some studies that show the direct correlation of rising T3 and T4 levels with high fasting blood glucose and insulin resistance.
Type 2 diabetics with metabolic syndrome showed a positive correlation of their Free T3 with fasting blood glucose. In other words, the higher their Free T3, the higher the fasting blood glucose.
Insulin sensitivity, measured with an ISI, was negatively correlated with both Free T3 and Free T4. In other words, the higher the FT3 and FT4, the lower the insulin sensitivity. Likewise, HOMA, a measure of insulin resistance, was positively correlated with both Free T3 and Free T4. In other words, as Free T3 and Free T4 increased, so did insulin resistance. Both Free T3 and Free T4 were within the normal range, just at the high end of the range. Insulin resistance is a feature of type 2 diabetes.
Insulin resistance was measured in Graves’ hyperthyroid patients before and after treatment with antithyroid drugs that brought their thyroid levels into the normal range. Insulin resistance, measured by HOMA, decreased once their thyroid levels decreased to a more normal level.  Serum glucose and insulin levels did not significantly change before and after treatment of the hyperthyroidism. However, BMI-adjusted insulin levels fell as both Free T3 and Free T4 also fell.
Thyroid hormone stimulates glucose production from the liver and at high levels, induces liver insulin resistance. In a comparison of hyperthyroid vs. normal patients, HGP (hepatic glucose production or glucose produced by the liver) was 20% higher in the hyperthyroid patients. After an intravenous infusion of glucose, insulin levels increased to 66% in the hyperthyroid patients vs. 37% in normal patients. The excess insulin showed a diminished inhibitory effect on glucose production, suggesting liver insulin resistance. 
Since insulin resistance is affected by thyroid hormone levels, a comparison was made between the T3/rT3 ratios of insulin resistant and insulin sensitive subjects. The T3/rT3 ratio was significantly higher in insulin resistant subjects, who had a higher proportion of T3 to rT3.  Since a high ratio is actually the goal of the T3-only protocol, and quite a few on the protocol notice their blood glucose rising, one might ask if the protocol itself is inducing the insulin resistance.
A suppressed TSH (below the reference range or close to zero) is also correlated with higher insulin levels, insulin resistance, and lower insulin sensitivity when compared to control subjects, even though Free T4 and T3 may be within the reference range. Insulin resistance, as measured by HOMA-IR, showed a positive relationship with T3 levels throughout the whole sample population of both controls and those on thyroid replacement. In other words, as T3 rose, so did insulin resistance. 
Blood sugar problems are a common topic of discussion on many thyroid forums. Some patients keep their Free T3 levels at the top or even above the reference ranges, and many are now starting to report elevated fasting blood glucose levels. Low-carb diets are the common recommendation, although it seems, from the research shown here, that many are just taking too much T3.
If thyroid levels were graphed with blood sugar problems, it would form a u-shaped curve, like most hormones. There is a small range of thyroid hormone which keeps blood sugar and insulin at healthy levels, but both too much and too little thyroid hormone will cause blood sugar problems. Apparently thyroid reference ranges are too broad, because symptoms of both too much and too little are appearing in subjects whose Free T3 and Free T4 values are within the normal reference ranges.
- Kim MK, Kwon HS, Baek KH, Lee JH, Park WC, Sohn HS, Lee KW, Song KH. Effects of thyroid hormone on A1C and glycated albumin levels in nondiabetic subjects with overt hypothyroidism. Diabetes Care. 2010 Dec;33(12):2546-8. http://www.ncbi.nlm.nih.gov/pubmed/20823345
- Kapadia KB, Bhatt PA, Shah JS. Association between altered thyroid state and insulin resistance. J Pharmacol Pharmacother. 2012 Apr;3(2):156-60. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3356957/
- Farasat T, Cheema AM, Khan MN. Hyperinsulinemia and insulin resistance is associated with low T(3)/T(4) ratio in pre diabetic euthyroid pakistani subjects. J Diabetes Complications. 2012 Jul 11. http://www.ncbi.nlm.nih.gov/pubmed/22795338
- Taneichi H, Sasai T, Ohara M, Honma H, Nagasawa K, Takahashi T, Ishii M, Fujiwara F, Yamashina M, Kajiwara T, Takabe N, Takahashi K, Satoh J. Higher serum free triiodothyronine levels within the normal range are associated with metabolic syndrome components in type 2 diabetic subjects with euthyroidism. Tohoku J Exp Med. 2011;224(3):173-8. http://www.ncbi.nlm.nih.gov/pubmed/21670570
- Pugeat M, Nader N, Hogeveen K, Raverot G, Déchaud H, Grenot C. Sex hormone-binding globulin gene expression in the liver: drugs and the metabolic syndrome. Mol Cell Endocrinol. 2010 Mar 5;316(1):53-9. http://www.ncbi.nlm.nih.gov/pubmed/19786070
- Lambadiari V, Mitrou P, Maratou E, Raptis AE, Tountas N, Raptis SA, Dimitriadis G. Thyroid hormones are positively associated with insulin resistanceearly in the development of type 2 diabetes. Endocrine. 2011 Feb;39(1):28-32. http://www.springerlink.com/content/u12721110m615834/fulltext.pdf
- Chih-Hsun Chu, Hing-Chung Lam, Jenn-Kuen Lee, et al., “Hyperthyroidism-Associated Insulin Resistance Is Not Mediated by Adiponectin Levels,” Journal of Thyroid Research, vol. 2011, Article ID 194721, 5 pages, 2011. http://www.hindawi.com/journals/jtr/2011/194721/
- Wennlund A, Felig P, Hagenfeldt L, Wahren J. Hepatic glucose production and splanchnic glucose exchange in hyperthyroidism. J Clin Endocrinol Metab. 1986 Jan;62(1):174-80. http://www.ncbi.nlm.nih.gov/pubmed/3510000
- Ruhla S, Arafat AM, Weickert MO, Osterhoff M, Isken F, Spranger J, Schöfl C, Pfeiffer AF, Möhlig M. T3/rT3-ratio is associated with insulin resistance independent of TSH. Horm Metab Res. 2011 Feb;43(2):130-4. http://www.ncbi.nlm.nih.gov/pubmed/21104580
- Rezzonico J, Niepomniszcze H, Rezzonico M, Pusiol E, Alberto M, Brenta G. The association of insulin resistance with subclinical thyrotoxicosis. Thyroid. 2011 Sep;21(9):945-9. http://www.ncbi.nlm.nih.gov/pubmed/21834678