Despite remarkable progress in dissecting the signaling pathways that are crucial for the metabolic effects of insulin, the molecular basis for the specificity of its cellular actions is not fully understood. One clue might lie in the spatial and temporal aspects of signaling. Recent evidence suggests that signaling molecules and pathways are localized to discrete compartments in cells by specific protein interactions. Also, the rapid termination of tyrosine or lipid phosphorylation by phosphatases or serine kinases might tightly control the strength of a signaling pathway, thus determining its effect on growth, differentiation and metabolism.