Insulin inhibits the expression of multiple genes in the liver containing an insulin response sequence (IRS) (CAAAA(C/T)AA), and we have reported that protein kinase B (PKB) mediates this effect of insulin. Genetic studies in Caenorhabditis elegans indicate that daf-16, a forkhead/winged-helix transcription factor, is a major target of the insulin receptor-PKB signaling pathway. FKHR, a human homologue of daf-16, contains three PKB sites and is expressed in the liver. Reporter gene studies in HepG2 hepatoma cells show that FKHR stimulates insulin-like growth factor-binding protein-1 promoter activity through an IRS, and introduction of IRSs confers this effect on a heterologous promoter. Insulin disrupts IRS-dependent transactivation by FKHR, and phosphorylation of Ser-256 by PKB is necessary and sufficient to mediate this effect. Antisense studies indicate that FKHR contributes to basal promoter function and is required to mediate effects of insulin and PKB on promoter activity via an IRS. To our knowledge, these results provide the first report that FKHR stimulates promoter activity through an IRS and that phosphorylation of FKHR by PKB mediates effects of insulin on gene expression. Signaling to FKHR-related forkhead proteins via PKB may provide an evolutionarily conserved mechanism by which insulin and related factors regulate gene expression.