New molecules discovered during the past ten years have created a rational framework to understand signalling transduction by a broad range of growth factors and cytokines, including insulin. Insulin action is initiated through the insulin receptor, a transmembrane glycoprotein with intrinsic protein tyrosine kinase activity. The tyrosine kinase mediates the insulin response through tyrosine phosphorylation of various cellular substrates, in particular the IRS-proteins. During insulin-stimulated tyrosine phosphorylation, the IRS-proteins mediate a broad biological response by binding and activating various enzymes or adapter molecules. Although we are far from a complete understanding of the insulin signalling system and its failure, enough pieces of the puzzle are falling into place that mechanism-based solutions to insulin resistance encountered with type II diabetes may soon be attainable. (Mol Cell Biochem 182: 3-11, 1998)