The sphingolipid ceramide negatively regulates insulin action by inhibiting Akt/protein kinase B (PKB), a serine/threonine kinase that is a central regulator of glucose uptake and anabolic metabolism. Despite considerable attention, the molecular mechanism accounting for this action of ceramide has remained both elusive and controversial. Herein we utilized deletion constructs encoding two different functional domains of Akt/PKB to identify which region of the enzyme conferred responsiveness to ceramide. Surprisingly the findings obtained with these separate domains reveal that ceramide blocks insulin stimulation of Akt/PKB by two independent mechanisms. First, using the isolated pleckstrin homology domain, we found that ceramide specifically blocks the translocation of Akt/PKB, but not its upstream activator phosphoinositide-dependent kinase-1, to the plasma membrane. Second, using a construct lacking this pleckstrin homology domain, which does not require translocation for activation, we found that ceramide stimulates the dephosphorylation of Akt/ PKB by protein phosphatase 2A. Collectively these findings identify at least two independent mechanisms by which excessive ceramide accumulation in peripheral tissues could contribute to the development of insulin resistance. Moreover the results obtained provide a unifying theory to account for the numerous dissenting reports investigating the actions of ceramide toward Akt/PKB.A strong correlation between intramyocellular lipid levels and the severity of insulin resistance has prompted investigators to hypothesize that insulin resistance results from the ectopic accumulation of fat in tissues other than adipose (1, 2). Specifically, many researchers have speculated that increased availability of lipids to peripheral tissues causes insulin resistance by promoting the accumulation of fat-derived metabolites capable of inhibiting insulin action (1, 2). Numerous recent studies support the hypothesis that the aberrant deposition of the sphingolipid ceramide in skeletal muscle and liver contributes to the development of insulin resistance resulting from lipid oversupply. First, insulin resistant rodents (3, 4) and humans (5, 6) have elevated ceramide levels in their peripheral tissues. Second, exercise training insulin-resistant rodents markedly improves their insulin sensitivity while substantially lowering intramuscular ceramide levels (7). Third, ceramide analogs or agents that induce endogenous ceramide accumulation inhibit insulin signaling and insulin-stimulated glycogen synthesis and glucose uptake (8 -14). Fourth, inhibitors of de novo ceramide synthesis prevent the antagonistic effects of saturated fatty acids on insulin signaling in cultured myotubes (9). The inhibitory effect of ceramides on insulin signaling result, at least partially, from their ability to block the phosphorylation and activation of Akt/protein kinase B, a serine/ threonine kinase that is a central mediator of many insulin effects (10, 15, 16). The studies described herein investigated the m...