JNK is a stress-activated protein kinase that modulates pathways implicated in a variety of disease states. JNK-interacting protein-1 (JIP1) is a scaffolding protein that enhances JNK signaling by creating a proximity effect between JNK and upstream kinases. A minimal peptide region derived from JIP1 is able to inhibit JNK activity both in vitro and in cell. We report here a series of small molecules JIP1 mimics that function as substrate competitive inhibitors of JNK. One such compound, BI-78D3, dose-dependently inhibits the phosphorylation of JNK substrates both in vitro and in cell. In animal studies, BI-78D3 not only blocks JNK dependent Con A-induced liver damage but also restores insulin sensitivity in mouse models of type 2 diabetes. Our findings open the way for the development of protein kinase inhibitors targeting substrate specific docking sites, rather than the highly conserved ATP binding sites. In view of its favorable inhibition profile, selectivity, and ability to function in the cellular milieu and in vivo, BI-78D3 represents not only a JNK inhibitor, but also a promising stepping stone toward the development of an innovative class of therapeutics.