The hormonal changes associated with a low carbohydrate diet include a reduction in the circulating levels of insulin along with increased levels of glucagon. This activates phosphoenolpyruvate carboxykinase, fructose 1,6-biphosphatase, and glucose 6-phosphatase and also inhibits pyruvate kinase, 6-phosphofructo-1-kinase, and glucokinase. These changes indeed favor gluconeogenesis.
However, the body limits glucose utilization to reduce the need for gluconeogenesis. In the liver in the well-fed state, acetyl CoA formed during the β-oxidation of fatty acids is oxidized to CO2 and H2O in the citric acid cycle. However, when the rate of mobilization of fatty acids from adipose tissue is accelerated, as, for example, during very low carbohydrate intake, the liver converts acetyl CoA into ketone bodies: Acetoacetate and 3-hydroxybutyrate. The liver cannot utilize ketone bodies because it lacks the mitochondrial enzyme succinyl CoA:3-ketoacid CoA transferase required for activation of acetoacetate to acetoacetyl CoA . Therefore, ketone bodies flow from the liver to extra-hepatic tissues (e.g., brain) for use as a fuel; this spares glucose metabolism via a mechanism similar to the sparing of glucose by oxidation of fatty acids as an alternative fuel. Indeed, the use of ketone bodies replaces most of the glucose required by the brain. Not all amino acid carbon will yield glucose; on average, 1.6 g of amino acids is required to synthesize 1 g of glucose . Thus, to keep the brain supplied with glucose at rate of 110 to 120 g/day, the breakdown of 160 to 200 g of protein (close to 1 kg of muscle tissue) would be required. This is clearly undesirable, and the body limits glucose utilization to reduce the need for gluconeogenesis and so spare muscle tissue. In comparison with glucose, the ketone bodies are a very good respiratory fuel. Whereas 100 g of glucose generates 8.7 kg of ATP, 100 g of 3-hydroxybutyrate can yield 10.5 kg of ATP, and 100 g of acetoacetate 9.4 kg of ATP . The brain will use ketone bodies whenever provided with them (i.e., whenever blood ketone body levels rise). The blood-brain barrier transporter for ketone bodies is induced during starvation or very low carbohydrate intake, further promoting the flow of ketone bodies . This transporter has a Km that exceeds the concentrations of circulating ketone bodies that occur during starvation or very low carbohydrate intake, and a Vmax well in excess of energy demands . Therefore, ketone body delivery to brain will never be limited by this transporter. However, continued use of some glucose appears obligatory  and is supplied by way of hepatic gluconeogenesis. Finally, because of the inactivation of pyruvate dehydrogenase (by the low insulin concentration), the glucose that is used by tissues outside the brain is largely only partially broken down to pyruvate and lactate, which can then be recycled in the liver trough gluconeogensis . Therefore, red blood cells, for instance, which have an obligatory requirement for glucose, are not depleting the body of glucose. Interestingly, Volek et al. recently reported that a very-low-carbohydrate diet resulted in a significant reduction in fat mass and a concomitant increase in lean body mass in normal-weight men . They hypothesized that elevated β-hydroxybutyrate concentrations may have played a minor role in preventing catabolism of lean tissue but other anabolic hormones were likely involved (e.g., growth hormone).