beta-arrestin-1 is an adaptor protein that mediates agonist-dependent internalization and desensitization of G-protein-coupled receptors (GPCRs) and also participates in the process of heterologous desensitization between receptor tyrosine kinases and GPCR signaling. In the present study, we determined whether beta-arrestin-1 is involved in insulin-induced insulin receptor substrate 1 (IRS-1) degradation. Overexpression of wild-type (WT) beta-arrestin-1 attenuated insulin-induced degradation of IRS-1, leading to increased insulin signaling downstream of IRS-1. When endogenous beta-arrestin-1 was knocked down by transfection of beta-arrestin-1 small interfering RNA, insulin-induced IRS-1 degradation was enhanced. Insulin stimulated the association of IRS-1 and Mdm2, an E3 ubiquitin ligase, and this association was inhibited to overexpression of WT beta-arrestin-1, which led by decreased ubiquitin content of IRS-1, suggesting that both beta-arrestin-1 and IRS-1 competitively bind to Mdm2. In summary, we have found the following: (i) beta-arrestin-1 can alter insulin signaling by inhibiting insulin-induced proteasomal degradation of IRS-1; (ii) beta-arrestin-1 decreases the rate of ubiquitination of IRS-1 by competitively binding to endogenous Mdm2, an E3 ligase that can ubiquitinate IRS-1; (iii) dephosphorylation of S412 on beta-arrestin and the amino terminus of beta-arrestin-1 are required for this effect of beta-arrestin on IRS-1 degradation; and (iv) inhibition of beta-arrestin-1 leads to enhanced IRS-1 degradation and accentuated cellular insulin resistance.