Mice with muscle-specific knockout of the Glut4 glucose transporter (muscle-G4KO) are insulin resistant and mildly diabetic. Here we show that despite markedly reduced glucose transport in muscle, muscle glycogen content in the fasted state is increased. We sought to determine the mechanism(s). Basal glycogen synthase activity is increased by 34% and glycogen phosphorylase activity is decreased by 17% (P < 0.05) in muscle of muscle-G4KO mice. Contraction-induced glycogen breakdown is normal. The increased glycogen synthase activity occurs in spite of decreased signaling through the insulin receptor substrate 1 (IRS-1)-phosphoinositide (PI) 3-kinase-Akt pathway and increased glycogen synthase kinase 3beta (GSK3beta) activity in the basal state. Hexokinase II is increased, leading to an approximately twofold increase in glucose-6-phosphate levels. In addition, the levels of two scaffolding proteins that are glycogen-targeting subunits of protein phosphatase 1 (PP1), the muscle-specific regulatory subunit (RGL) and the protein targeting to glycogen (PTG), are strikingly increased by 3.2- to 4.2-fold in muscle of muscle-G4KO mice compared to wild-type mice. The catalytic activity of PP1, which dephosphorylates and activates glycogen synthase, is also increased. This dominates over the GSK3 effects, since glycogen synthase phosphorylation on the GSK3-regulated site is decreased. Thus, the markedly reduced glucose transport in muscle results in increased glycogen synthase activity due to increased hexokinase II, glucose-6-phosphate, and RGL and PTG levels and enhanced PP1 activity. This, combined with decreased glycogen phosphorylase activity, results in increased glycogen content in muscle in the fasted state when glucose transport is reduced.