One of the first steps that follows insulin receptor activation is the tyrosine phosphorylation of the 160-185 kDa insulin receptor substrate IRS-1. In 3T3-L1 adipocytes, expression of IRS-1 is down-regulated by chronic exposure to insulin. Expression of IRS-1 mRNA is essentially unchanged. However, [35S]Met pulse-chase labeling demonstrates that the rate of degradation of IRS-1 protein is about 10 times faster in insulin-treated cells than in basal cells. The down-regulation occurs in the presence of cycloheximide or actinomycin D and therefore is not dependent upon protein synthesis. Chloroquine does not inhibit the insulin-induced degradation, suggesting that the site of proteolysis is an extra-lysosomal compartment. The insulin-regulated proteolysis of IRS-1 may contribute to the insulin resistance seen in these cells following chronic exposure to insulin.