To determine the molecular mechanism underlying hyperglycemia-induced insulin resistance in skeletal muscles, postreceptor insulin-signaling events were assessed in skeletal muscles of neonatally streptozotocin-treated diabetic rats. In isolated soleus muscle of the diabetic rats, insulin-stimulated 2-deoxyglucose uptake, glucose oxidation, and lactate release were all significantly decreased compared with normal rats. Similarly, insulin-induced phosphorylation and activation of Akt/protein kinase B (PKB) and GLUT-4 translocation were severely impaired. However, the upstream signal, including phosphorylation of the insulin receptor (IR) and insulin receptor substrate (IRS)-1 and -2 and activity of phosphatidylinositol (PI) 3-kinase associated with IRS-1/2, was enhanced. The amelioration of hyperglycemia by T-1095, a Na⁺-glucose transporter inhibitor, normalized the reduced insulin sensitivity in the soleus muscle and the impaired insulin-stimulated Akt/PKB phosphorylation and activity. In addition, the enhanced PI 3-kinase activation and phosphorylation of IR and IRS-1 and -2 were reduced to normal levels. These results suggest that sustained hyperglycemia impairs the insulin-signaling steps between PI 3-kinase and Akt/PKB, and that impaired Akt/PKB activity underlies hyperglycemia-induced insulin resistance in skeletal muscle.