Bioactive compound(s) extracted from cinnamon potentiate insulin activity, as measured by glucose oxidation in the rat epididymal fat cell assay. Wortmannin, a potent PI 3'-kinase inhibitor, decreases the biological response to insulin and bioactive compound(s) from cinnamon similarly, indicating that cinnamon is affecting an element(s) upstream of PI 3'-kinase. Enzyme studies done in vitro show that the bioactive compound(s) can stimulate autophosphorylation of a truncated form of the insulin receptor and can inhibit PTP-1, a rat homolog of a tyrosine phosphatase (PTP-1B) that inactivates the insulin receptor. No inhibition was found with alkaline phosphate or calcineurin suggesting that the active material is not a general phosphatase inhibitor. It is suggested, then, that a cinnamon compound(s), like insulin, affects protein phosphorylation-dephosphorylation reactions in the intact adipocyte. Bioactive cinnamon compounds may find further use in studies of insulin resistance in adult-onset diabetes.