Our objective was to compare the effects of in vivo insulin on skeletal muscle glycogen synthase (GS) activity in normal (NGT) vs. impaired glucose-tolerant (IGT) obese postmenopausal women and to determine whether an increase in insulin activation of GS is associated with an improvement in insulin sensitivity (M) following calorie restriction (CR) and/or aerobic exercise plus calorie restriction (AEX + CR) in women with NGT and IGT. We did a longitudinal, clinical intervention study of CR compared with AEX + CR. Overweight and obese women, 49-76 yr old, completed 6 mo of CR (n = 46) or AEX + CR (n = 50) with Vo(2 max), body composition, and glucose tolerance testing. Hyperinsulinemic euglycemic (80 mU·m(-2)·min(-1)) clamps (n = 73) and skeletal muscle biopsies (before and during clamp) (n = 58) were performed before and after the interventions (n = 50). After 120 min of hyperinsulinemia during the clamp, GS fractional activity and insulin's effect to increase GS fractional activity (insulin - basal) were significantly lower in IGT vs. NGT (P < 0.01) at baseline. GS total activity increased during the clamp in NGT (P < 0.05), but not IGT, at baseline. CR and AEX + CR resulted in a significant 8% weight loss with reductions in total fat mass, visceral fat, subcutaneous fat, and intramuscular fat. Overall, M increased (P < 0.01), and the change in M (postintervention - preintervention) was associated with the change in insulin-stimulated GS fractional activity (partial r = 0.44, P < 0.005). In IGT, the change (postintervention - preintervention) in insulin-stimulated GS total activity was greater following AEX + CR than CR alone (P < 0.05). In IGT, insulin-stimulated GS-independent (P < 0.005) and fractional activity (P = 0.06) increased following AEX + CR. We conclude that the greatest benefits at the whole body and cellular level (insulin activation of GS) in older women at highest risk for diabetes are derived from a lifestyle intervention that includes exercise and diet.