Tyrosine phosphorylation of insulin receptor substrate-1 (IRS-1) by the insulin receptor permits this docking protein to interact with signaling proteins that promote insulin action. Serine phosphorylation uncouples IRS-1 from the insulin receptor, thereby inhibiting its tyrosine phosphorylation and insulin signaling. For this reason, there is great interest in identifying serine/threonine kinases for which IRS-1 is a substrate. Tumor necrosis factor (TNF) inhibited insulin-promoted tyrosine phosphorylation of IRS-1 and activated the Akt/protein kinase B serine-threonine kinase, a downstream target for phosphatidylinositol 3-kinase (PI 3-kinase). The effect of TNF on insulin-promoted tyrosine phosphorylation of IRS-1 was blocked by inhibition of PI 3-kinase and the PTEN tumor suppessor, which dephosphorylates the lipids that mediate PI 3-kinase functions, whereas constitutively active Akt impaired insulin-promoted IRS-1 tyrosine phosphorylation. Conversely, TNF inhibition of IRS-1 tyrosine phosphorylation was blocked by kinase dead Akt. Inhibition of IRS-1 tyrosine phosphorylation by TNF was blocked by rapamycin, an inhibitor of the mammalian target of rapamycin (mTOR), a downstream target of Akt. mTOR induced the serine phosphorylation of IRS-1 (Ser-636/639), and such phosphorylation was inhibited by rapamycin. These results suggest that TNF impairs insulin signaling through IRS-1 by activation of a PI 3-kinase/Akt/mTOR pathway, which is antagonized by PTEN.