Berberine, a major isoquinoline alkaloid present in Chinese herb Rhizoma coptidis, is a potent inhibitor of inflammation and has anti-diabetic activity. This study aims to investigate effects of berberine on ameliorating insulin resistance and molecular mechanisms involved in HepG2 cells. Inflammatory responses and insulin resistance were induced by palmitate (PA) stimulation for 24 h. Treatment of berberine enhanced insulin-mediated glycogen synthesis and restored insulin inhibition of triglyceride secretion. Stimulation of PA resulted in IL-6 and TNF-α production in HepG2 cells, and antibody-neutralizing assay further confirmed that IL-6 and TNF-α were involved in the development of insulin resistance. Berberine effectively inhibited IL-6 and TNF-α production in a concentration-dependent manner, demonstrating its anti-inflammatory activity in hepatocytes. Meanwhile, PA-evoked inflammation impaired insulin signaling cascade and berberine improved insulin signaling cascade by modification of Ser/Thr phosphorylation of insulin receptor substrate-1(IRS-1) and downstream Akt (T308). Above results suggest that berberine improved insulin sensitivity in PA-stimulated hepatocytes and this regulation might relative with its anti-inflammatory activity.