Despite significant technological and pharmacological advancements, insulin replacement therapy fails to adequately replicate β-cell function, and so glucose control in type 1 diabetes mellitus (T1D) is frequently erratic, leading to periods of hypoglycemia. Moreover, the counterregulatory response (CRR) to falling blood glucose is impaired in diabetes, leading to an increased risk of severe hypoglycemia. It is now clear that the brain plays a significant role in the development of defective glucose counterregulation and impaired hypoglycemia awareness in diabetes. In this review, the basic intracellular glucose-sensing mechanisms are discussed, as well as the neural networks that respond to and coordinate the body's response to a hypoglycemic challenge. Subsequently, we discuss how the body responds to repeated hypoglycemia and how these adaptations may explain, at least in part, the development of impaired glucose counterregulation in diabetes.