Type 2 diabetes is characterized by the inability of insulin to suppress glucose production in the liver and kidney. Insulin inhibits glucose production by indirect and direct mechanisms. The latter result in transcriptional suppression of key gluconeogenetic and glycogenolytic enzymes, phosphoenolpyruvate carboxykinase (Pepck) and glucose-6-phosphatase (G6p). The transcription factors required for this effect are incompletely characterized. We report that in glucogenetic kidney epithelial cells, Pepck and G6p expression are induced by dexamethasone (dex) and cAMP, but fail to be inhibited by insulin. The inability to respond to insulin is associated with reduced expression of the forkhead transcription factor Foxo1, a substrate of the Akt kinase that is inhibited by insulin through phosphorylation. Transduction of kidney cells with recombinant adenovirus encoding Foxo1 results in insulin inhibition of dex/cAMP-induced G6p expression. Moreover, expression of dominant negative Foxo1 mutant results in partial inhibition of dex/cAMP-induced G6p and Pepck expression in primary cultures of mouse hepatocyes and kidney LLC-PK1-FBPase(+) cells. These findings are consistent with the possibility that Foxo1 is involved in insulin regulation of glucose production by mediating the ability of insulin to decrease the glucocorticoid/cAMP response of G6p.