Gene targeting was used to characterize the physiological role of growth factor receptor-bound (Grb)14, an adapter-type signalling protein that associates with the insulin receptor (IR). Adult male Grb14(-/-) mice displayed improved glucose tolerance, lower circulating insulin levels, and increased incorporation of glucose into glycogen in the liver and skeletal muscle. In ex vivo studies, insulin-induced 2-deoxyglucose uptake was enhanced in soleus muscle, but not in epididymal adipose tissue. These metabolic effects correlated with tissue-specific alterations in insulin signalling. In the liver, despite lower IR autophosphorylation, enhanced insulin-induced tyrosine phosphorylation of insulin receptor substrate (IRS)-1 and activation of protein kinase B (PKB) was observed. In skeletal muscle, IR tyrosine phosphorylation was normal, but signalling via IRS-1 and PKB was increased. Finally, no effect of Grb14 ablation was observed on insulin signalling in white adipose tissue. These findings demonstrate that Grb14 functions in vivo as a tissue-specific modulator of insulin action, most likely via repression of IR-mediated IRS-1 tyrosine phosphorylation, and highlight this protein as a potential target for therapeutic intervention.