Despite the fact that X-box binding protein-1 (XBP-1) is one of the main regulators of the unfolded protein response (UPR), the modulators of XBP-1 are poorly understood. Here, we show that the regulatory subunits of phosphotidyl inositol 3-kinase (PI3K), p85alpha (encoded by Pik3r1) and p85beta (encoded by Pik3r2) form heterodimers that are disrupted by insulin treatment. This disruption of heterodimerization allows the resulting monomers of p85 to interact with, and increase the nuclear translocation of, the spliced form of XBP-1 (XBP-1s). The interaction between p85 and XBP-1s is lost in ob/ob mice, resulting in a severe defect in XBP-1s translocation to the nucleus and thus in the resolution of endoplasmic reticulum (ER) stress. These defects are ameliorated when p85alpha and p85beta are overexpressed in the liver of ob/ob mice. Our results define a previously unknown insulin receptor signaling pathway and provide new mechanistic insight into the development of ER stress during obesity.