Phosphatidylinositol 3-kinase (PI 3-kinase) is stimulated by insulin and a variety of growth factors, but its exact role in signal transduction remains unclear. We have used a novel, highly specific inhibitor of PI 3-kinase to dissect the role of this enzyme in insulin action. Treatment of intact 3T3-L1 adipocytes with LY294002 produced a dose-dependent inhibition of insulin-stimulated PI 3-kinase (50% inhibitory concentration, 6 μM) with> 95% reduction in the levels of phosphatidylinositol-3, 4, 5-trisphosphate without changes in the levels of phosphatidylinositol-4-monophosphate or its derivatives. In parallel, there was a complete inhibition of insulin-stimulated phosphorylation and activation of pp70 S6 kinase. Inhibition of PI 3-kinase also effectively blocked insulin-and serum-stimulated DNA synthesis and insulin-stimulated glucose uptake by inhibiting translocation of GLUT 4 glucose transporters to the plasma membrane. By contrast, LY294002 had no effect on insulin stimulation of mitogen-activated protein kinase or pp90 S6 kinase. Thus, activation of PI 3-kinase plays a critical role in mammalian cells and is required for activation of pp70 S6 kinase and DNA synthesis and certain forms of intracellular vesicular trafficking but not mitogen-activated protein kinase or pp90 S6 kinase activation. These data suggest that PI 3-kinase is not only an important component but also a point of divergence in the insulin signaling network.