The metabolism of the storage polysaccharide glycogen is intimately linked with insulin action and blood glucose homeostasis. Insulin activates both glucose transport and glycogen synthase in skeletal muscle. The central issue of a long-standing debate is which of these two effects determines the rate of glycogen synthesis in response to insulin. Recent studies with transgenic animals indicate that, under appropriate conditions, each process can contribute to determining the extent of glycogen accumulation. Insulin causes stable activation of glycogen synthase by promoting dephosphorylation of multiple sites in the enzyme. A model linking this action to the mitogen-activated protein kinase signaling pathway via the phosphorylation of the regulatory subunit of glycogen synthase phosphatase gained widespread acceptance. However, the most recent evidence argues strongly against this mechanism. A newer model, in which insulin inactivates the enzyme glycogen synthase kinase-3 via the protein kinase B pathway, has emerged. Though promising, this model still does not completely explain the molecular basis for the insulin-mediated activation of glycogen synthase, which remains one of the many unknowns of insulin action.