We examined the effects of insulin on the phosphorylation state of cAMP response element-binding protein (CREB) in normal rat adipocytes. Insulin increased in vivo phosphorylation of CREB by 40%. Although both phosphoprotein phosphatase-1 and -2A dephosphorylate CREB and activating transcription factor-1, insulin action appears to be mediated via its strong inhibitory effect on nuclear phosphatase-2A (PP-2A) activity. Using in vitro protein kinase-A-phosphorylated activating transcription factor-1 as a substrate, we found that insulin inhibited nuclear PP-2A activity by 80% (P < 0.001), which represents approximately 50% of the total nuclear phosphatase activity. Greater than 50% of the effect of insulin was observed at 0.3 nM and 2 min of exposure. These findings are the first indicator that a signal initiated by a cell surface tyrosine kinase receptor may regulate nuclear PP-2A activity and thereby affect the phosphorylation state of transcription factors.