Insulin receptor substrate (IRS)-1 and IRS-2 are the major substrates that mediate insulin action. Insulin itself regulates the expression of the IRS protein in the liver, but the underlying mechanisms of IRS-1 and IRS-2 regulation are not fully understood. Here we report that insulin suppressed the expression of both IRS-1 and IRS-2 proteins in Fao hepatoma cells. The decrease in IRS-1 protein occurred via proteasomal degradation without any change in IRS-1 mRNA, whereas the insulin-induced suppression of IRS-2 protein was associated with a parallel decrease in IRS-2 mRNA without changing IRS-2 mRNA half-life. The insulin-induced suppression of IRS-2 mRNA and protein was blocked by the phosphatidylinositol (PI) 3-kinase inhibitor, LY294002, but not by the MAP kinase-ERK kinase (MEK) inhibitor, PD098059. Inhibition of Akt by overexpression of dominant-negative Akt also caused complete attenuation of the insulin-induced decrease in IRS-2 protein and partial attenuation of its mRNA down-regulation. Some nuclear proteins bound to the insulin response element (IRE) sequence on the IRS-2 gene in an insulindependent manner in vitro, and the binding was also blocked by the PI 3-kinase inhibitor. Reporter gene assay showed that insulin suppressed the activity of both human and rat IRS-2 gene promoters through the IRE in a PI 3-kinase-dependent manner. Our results indicate that insulin regulates IRS-1 and IRS-2 through different mechanisms and that insulin represses IRS-2 gene expression via a PI 3-kinase/Akt pathway.