Increased flux of glucose through the hexosamine biosynthetic pathway (HSP) is believed to mediate hyperglycemia-induced insulin resistance in diabetes. The end product of the HSP, UDP beta-N-acetylglucosamine (GlcNAc), is a donor sugar nucleotide for complex glycosylation in the secretory pathway and for O-linked GlcNAc (O-GlcNAc) addition to nucleocytoplasmic proteins. Cycling of the O-GlcNAc posttranslational modification was blocked by pharmacological inhibition of O-GlcNAcase, the enzyme that catalyzes O-GlcNAc removal from proteins, with O-(2-acetamido-2-deoxy-d-glucopyranosylidene)amino-N-phenylcarbamate (PUGNAc). PUGNAc treatment increased levels of O-GlcNAc and caused insulin resistance in 3T3-L1 adipocytes. Insulin resistance induced through the HSP by glucosamine and chronic insulin treatment correlated with increased O-GlcNAc levels on nucleocytoplasmic proteins. Whereas insulin receptor autophosphorylation and insulin receptor substrate 2 tyrosine phosphorylation were not affected by PUGNAc inhibition of O-GlcNAcase, downstream phosphorylation of Akt at Thr-308 and glycogen synthase kinase 3 beta at Ser-9 was inhibited. PUGNAc-induced insulin resistance was associated with increased O-GlcNAc modification of several proteins including insulin receptor substrate 1 and beta-catenin, two important effectors of insulin signaling. These results suggest that elevation of O-GlcNAc levels attenuate insulin signaling and contribute to the mechanism by which increased flux through the HSP leads to insulin resistance in adipocytes.