Insulin resistance and increased cytochrome P450 2E1 (CYP2E1) expression are both associated with and mechanistically implicated in the development of nonalcoholic fatty liver disease. Although currently viewed as distinct factors, insulin resistance and CYP2E1 expression may be interrelated through the ability of CYP2E1-induced oxidant stress to impair hepatic insulin signaling. To test this possibility, the effects of in vitro and in vivo CYP2E1 overexpression on hepatocyte insulin signaling were examined. CYP2E1 overexpression in a hepatocyte cell line decreased tyrosine phosphorylation of insulin receptor substrate (IRS)-1 and IRS-2 in response to insulin. CYP2E1 overexpression was also associated with increased inhibitory serine 307 and 636/639 IRS-1 phosphorylation. In parallel, the effects of insulin on Akt activation, glycogen synthase kinase 3, and FoxO1a phosphorylation, and glucose secretion were all significantly decreased in CYP2E1 overexpressing cells. This inhibition of insulin signaling by CYP2E1 overexpression was partially c-Jun N-terminal kinase dependent. In the methionine-and choline-deficient diet mouse model of steatohepatitis with CYP2E1 overexpression, insulin-induced IRS-1, IRS-2, and Akt phosphorylation were similarly decreased. These findings indicate that increased hepatocyte CYP2E1 expression and the presence of steatohepatitis result in the down-regulation of insulin signaling, potentially contributing to the insulin resistance associated with nonalcoholic fatty liver disease.