We examined the effect of physiological hyperinsulinemia on insulin receptor substrate-1 (IRS-1) tyrosine phosphorylation and phosphatidylinositol (PI) 3-kinase activity in skeletal muscle from six lean–to–moderately obese NIDDM patients and six healthy subjects. A rise in serum insulin levels from ∼60 to ∼650 pmol/l increased IRS-1 tyrosine phosphorylation sixfold over basal levels in control muscle (P < 0.01), whereas no significant increase was noted in NIDDM muscle. The reduced IRS-1 phosphorylation in the NIDDM muscle was not related to changes in IRS-1 protein content, since IRS-1 protein expression was similar between control and NIDDM subjects (16.0 ± 1.7 vs. 22.9 ± 4.0 arbitrary units/mg protein for control and NIDDM, respectively; NS). Physiological hyperinsulinemia increased PI 3-kinase activity in control muscle twofold (P < 0.01), whereas no increase in insulin-stimulated PI 3-kinase activity was noted in the NIDDM muscle. Furthermore, in vitro insulin-stimulated (600 pmol/l) 3-O-methylglucose transport was 40% lower in isolated muscle from NIDDM subjects (P < 0.05). The present findings couple both reduced insulin-stimulated IRS-1 tyrosine phosphorylation and PI 3-kinase activity to the impaired insulin-stimulated glucose transport in skeletal muscle from lean–to–moderately obese NIDDM subjects.