Insulin receptor substrate (IRS) has been suggested as a molecular target of free fatty acids (FFAs) for insulin resistance. However, the signaling pathways by which FFAs lead to the inhibition of IRS function remain to be established. In this study, we explored the FFA-signaling pathway that contributes to serine phosphorylation and degradation of IRS-1 in adipocytes and in dietary obese mice. Linoleic acid, an FFA used in this study, resulted in a reduction in insulin-induced glucose uptake in 3T3-L1 adipocytes. This mimics insulin resistance induced by high-fat diet in C57BL/6J mice. The reduction in glucose uptake is associated with a decrease in IRS-1, but not IRS-2 or GLUT4 protein abundance. Decrease in IRS-1 protein was proceeded by IRS-1 (serine 307) phosphorylation that was catalyzed by serine kinases inhibitor κB kinase (IKK) and c-JUN NH₂-terminal kinase (JNK). IKK and JNK were activated by linoleic acid and inhibition of the two kinases led to prevention of IRS-1 reduction. We demonstrate that protein kinase C (PKC) θ is expressed in adipocytes. In 3T3-L1 adipocytes and fat tissue, PKCθ was activated by fatty acids as indicated by its phosphorylation status, and by its protein level, respectively. Activation of PKCθ contributes to IKK and JNK activation as inhibition of PKCθ by calphostin C blocked activation of the latter kinases. Inhibition of either PKCθ or IKK plus JNK by chemical inhibitors resulted in protection of IRS-1 function and insulin sensitivity in 3T3-L1 adipocytes. These data suggest that: 1) activation of PKCθ contributes to IKK and JNK activation by FFAs; 2) IKK and JNK mediate PKCθ signals for IRS-1 serine phosphorylation and degradation; and 3) this molecular mechanism may be responsible for insulin resistance associated with hyperlipidemia.