Insulin and insulin-like growth factor I signals are mediated via phosphorylation of a family of insulin receptor substrate (IRS) proteins, which may serve both complementary and overlapping functions in the cell. To study the metabolic effects of these proteins in more detail, we established brown adipocyte cell lines from wild type and various IRS knockout (KO) animals and characterized insulin action in these cells in vitro. Preadipocytes derived from both wild type and IRS-2 KO mice could be fully differentiated into mature brown adipocytes. In differentiated IRS-2 KO adipocytes, insulin-induced glucose uptake was decreased by 50% compared with their wild type counterparts. This was the result of a decrease in insulin-stimulated Glut4 translocation to the plasma membrane. This decrease in insulin-induced glucose uptake could be partially reconstituted in these cells by retrovirus-mediated re-expression of IRS-2, but not overexpression of IRS-1. Insulin signaling studies revealed a total loss of IRS-2-associated phosphatidylinositol (PI) 3-kinase activity and a reduction in phosphotyrosine-associated PI 3-kinase by 30% (p 0.05) in the KO cells. The phosphorylation and activity of Akt, a major downstream effector of PI 3-kinase, as well as Akt-dependent phosphorylation of glycogen synthase kinase-3 and p70S6 kinase were not affected by the lack of IRS-2; however, there was a decrease in insulin stimulation of Akt associated with the plasma membrane. These results provide evidence for a critical role of IRS-2 as a mediator of insulin-stimulated Glut4 translocation and glucose uptake in adipocytes. This occurs without effects in differentiation, total activation of Akt and its downstream effectors, but may be caused by alterations in compartmentalization of these downstream signals.