Chronic elevation of proinflammatory markers in type 2 diabetes (T2D) is well defined, but the role of anti-inflammatory cytokines in T2D is less clear. In this study, we report that normal IL-4-dependent elaboration of IL-1 receptor antagonist (IL-1RA) requires IRS-2-mediated PI3K activity in primary macrophages. We also show that macrophages isolated from obese/diabetic db/db mice have impaired IRS-2-mediated PI3K activity and constitutively overexpress suppressor of cytokine signaling (SOCS)-3, which impairs an important IL-4 anti-inflammatory function. Peritoneal proinflammatory cytokine levels were examined in diabese (db/db) mice, and IL-6 was found to be nearly 7-fold higher than in nondiabese (db/+) control mice. Resident peritoneal macrophages were isolated from db/db mice and were found to constitutively overexpress IL-6 and were unable to elaborate IL-1RA in response to IL-4-like db/+ mouse macrophages. Inhibition of PI3K with wortmannin or blockage of IRS-2/PI3K complex formation with a cell permeable IRS-2-derived tyrosine phosphopeptide inhibited IL-4-dependent IL-1RA production in db/+ macrophages. Examination of IL-4 signaling in db/db macrophages revealed that IL-4-dependent IRS-2/PI3K complex formation and IRS-2 tyrosine phosphorylation was reduced compared with db/+ macrophages. SOCS-3/IL-4 receptor complexes, however, were increased in db/db mouse macrophages compared with db/+ mice macrophages as was db/db mouse macrophage SOCS-3 expression. These results indicate that in the db/db mouse model of T2D, macrophage expression of SOCS-3 is increased, and impaired IL-4-dependent IRS-2/PI3K formation induces a state of IL-4 resistance that disrupts IL-4-dependent production of IL-1RA.