Phosphatidylinositol (PI) 3-kinase plays an important role in various insulin-stimulated biological responses including glucose transport, glycogen synthesis, and protein synthesis. However, the molecular link between PI 3-kinase and these biological responses is still unclear. We have investigated whether targeting of the catalytic p110 subunit of PI 3-kinase to cellular membranes is sufficient and necessary to induce PI 3-kinase dependent signaling responses, characteristic of insulin action. We overexpressed Myc-tagged, membrane-targeted p110 (p110(CAAX)), and wild-type p110 (p110(WT)) in 3T3-L1 adipocytes by adenovirus-mediated gene transfer. Overexpressed p110(CAAX) exhibited approximately 2-fold increase in basal kinase activity in p110 immunoprecipitates, that further increased to approximately 4-fold with insulin. Even at this submaximal PI 3-kinase activity, p110(CAAX) fully stimulated p70 S6 kinase, Akt, 2-deoxyglucose uptake, and Ras, whereas, p110(WT) had little or no effect on these downstream effects. Interestingly p110(CAAX) did not activate MAP kinase, despite its stimulation of p21(ras). Surprisingly, p110(CAAX) did not increase basal glycogen synthase activity, and inhibited insulin stimulated activity, indicative of cellular resistance to this action of insulin. p110(CAAX) also inhibited insulin stimulated, but not platelet-derived growth factor-stimulated mitogen-activated protein kinase phosphorylation, demonstrating that the p110(CAAX) induced inhibition of mitogen-activated protein kinase and insulin signaling is specific, and not due to some toxic or nonspecific effect on the cells. Moreover, p110(CAAX) stimulated IRS-1 Ser/Thr phosphorylation, and inhibited IRS-1 associated PI 3-kinase activity, without affecting insulin receptor tyrosine phosphorylation, suggesting that it may play an important role as a negative regulator for insulin signaling. In conclusion, our studies show that membrane-targeted PI 3-kinase can mimic a number of biologic effects normally induced by insulin. In addition, the persistent activation of PI 3-kinase induced by p110(CAAX) expression leads to desensitization of specific signaling pathways. Interestingly, the state of cellular insulin resistance is not global, in that some of insulin's actions are inhibited, whereas others are intact.