Defective insulin signaling in hepatocytes is a key factor in type 2 diabetes. In obesity, activation of calcium/calmodulin-dependent protein kinase II (CaMKII) in hepatocytes suppresses ATF6, which triggers a PERK-ATF4-TRB3 pathway that disrupts insulin signaling. Elucidating how CaMKII suppresses ATF6 is therefore essential to understanding this insulin resistance pathway. We show that CaMKII phosphorylates and blocks nuclear translocation of histone deacetylase 4 (HDAC4). As a result, HDAC4-mediated SUMOylation of the corepressor DACH1 is decreased, which protects DACH1 from proteasomal degradation. DACH1, together with nuclear receptor corepressor (NCOR), represses Atf6 transcription, leading to activation of the PERK-TRB3 pathway and defective insulin signaling. DACH1 is increased in the livers of obese mice and humans, and treatment of obese mice with liver-targeted constitutively nuclear HDAC4 or DACH1 small hairpin RNA (shRNA) increases ATF6, improves hepatocyte insulin signaling, and protects against hyperglycemia and hyperinsulinemia. Thus, DACH1-mediated corepression in hepatocytes emerges as an important link between obesity and insulin resistance.