Insulin is thought to exert its effects on cellular function through the phosphorylation or dephosphorylation of specific regulatory substrates. We have analyzed the effects of okadaic acid, a potent inhibitor of type 1 and 2A protein phosphatases, on the ability of insulin to stimulate glucose transport in rat adipocytes. Insulin and okadaic acid caused a 20-25- and a 3-6-fold increase, respectively, in the rate of 2-deoxyglucose accumulation by adipose cells. When added to cells previously treated with okadaic acid, insulin failed to stimulate 2-deoxyglucose accumulation beyond the levels observed with okadaic acid alone. Treatment of cells with okadaic acid did not inhibit the effect of insulin to stimulate tyrosine autophosphorylation of its receptor. These results indicate that okadaic acid potently inhibits the effects of insulin to stimulate glucose uptake and/or utilization at a step after receptor activation. To clarify the mechanism of inhibition by okadaic acid, the intrinsic activity of the plasma membrane glucose transporters was analyzed by measuring the rate of uptake of 3-O-methylglucose by adipose cells, and the concentration of adipocyte/skeletal muscle isoform of the glucose transporter (GLUT-4) in plasma membranes isolated from these cells. Insulin caused a 15-20-fold stimulation of 3-O-methylglucose uptake and a 2-3-fold increase in the levels of GLUT-4 detected by immunoblotting of isolated plasma membranes; okadaic acid caused a 2-fold increase in 3-O-methylglucose uptake, and a 1.5-fold increase in plasma membrane GLUT-4. Pretreatment of cells with okadaic acid blocked the effect of insulin to stimulate 3-O-methylglucose uptake and to increase the plasma membrane concentration of GLUT-4 beyond the levels observed with okadaic acid alone. These results indicate that the effect of okadaic acid to inhibit the effect of insulin on glucose uptake is exerted at a step prior to the recruitment of glucose transporters to the cell surface, and suggest that a phosphatase activity may be critical for this process.