The effect of insulin on the state of phosphorylation of hormone-sensitive lipase, cellular cAMP-dependent protein kinase activity and lipolysis was investigated in isolated adipocytes. Increased phosphorylation of hormone-sensitive lipase in response to isoproterenol stimulation was closely paralleled by increased lipolysis. Maximal phosphorylation and lipolysis was obtained when the cAMP-dependent protein kinase activity ratio was greater than or equal to 0.1, and this corresponded to a 50% increase in the state of phosphorylation of hormone-sensitive lipase. Insulin (1 nM) reduced cAMP-dependent protein kinase activity and also reduced lipolysis with both cAMP-dependent and cAMP-independent antilipolytic effects up to an activity ratio of approximately 0.4, above which the antilipolytic effect was lost. Insulin caused a decrease in the state of phosphorylation of hormone-sensitive lipase at all levels of cAMP-dependent protein kinase activity. Under basal conditions, with cAMP-dependent protein kinase activity at a minimum, this reflected a dephosphorylation of the basal phosphorylation site of hormone-sensitive lipase in a manner not mediated by cAMP. When the cAMP-dependent protein kinase was stimulated to phosphorylate the regulatory phosphorylation site of hormone-sensitive lipase, the insulin-induced dephosphorylation occurred both at the basal and regulatory sites. At low levels of cAMP-dependent protein kinase activity ratios (0.05-0.1), dephosphorylation of the regulatory site correlated with reduced cAMP-dependent protein kinase activity, but not at higher activity ratios (greater than 0.1). Stimulation of cells with isoproterenol produced a transient (1-5 min) peak of cAMP-dependent protein kinase activity and of phosphorylation of hormone-sensitive lipase. The state of phosphorylation also showed a transient peak when the protein kinase was maximally and constantly activated. In the presence of raised levels of cellular cAMP, insulin (1 nM) caused a rapid (t1/2 approximately 1 min) dephosphorylation of hormone-sensitive lipase. In unstimulated cells the reduction in phosphorylation caused by insulin was distinctly slower (t1/2 approximately 5 min). These findings are interpreted to suggest that insulin affects the state of phosphorylation of hormone-sensitive lipase and lipolysis through a cAMP-dependent pathway, involving reduction of cAMP, and through a cAMP-independent pathway, involving activation of a protein phosphatase activity that dephosphorylates both the regulatory and basal phosphorylation sites of hormone-sensitive lipase.