The FOXO family of forkhead transcription factors stimulates the transcription of target genes involved in many fundamental cell processes, including cell survival, cell cycle progression, DNA repair, and insulin sensitivity. The activity of FOXO proteins is principally regulated by activation of protein kinase B (PKB)/Akt by insulin and other cytokines. PKB/Akt phosphorylates three consensus sites in FOXO proteins, leading to their export from the nucleus and the inhibition of FOXO-stimulated transcription. It has been widely accepted that the decreased transcription results from reduced abundance of FOXO proteins in the nucleus. In the present study we mutated Leu375 to alanine in the nuclear export signal of Foxo1 (mouse FOXO1), so that it would remain in the nucleus of H4IIE rat hepatoma cells after insulin treatment, and determined whether insulin could still inhibit transcription stimulated by the Foxo1 mutant. Despite the retention of the Foxo1 mutant in the nucleus, insulin inhibited L375A-Foxo1-stimulated transcription to the same extent as transcription stimulated by wild-type Foxo1. Similar results were obtained using reporter plasmids containing the rat IGF-binding protein-1 promoter or a minimal promoter with three copies of the insulin response element to which FOXO proteins bind. We conclude that insulin can inhibit Foxo1-stimulated transcription even when nuclear export of Foxo1 is prevented, indicating that insulin inhibition can occur by direct mechanisms that do not depend on altering the subcellular distribution of the transcription factor.