Insulin increases phosphatidylinositol-3-kinase (PI-3-kinase) activity in Chinese hamster ovary cells transfected with human insulin receptor (Ruderman, N. B., Kapeller, R., White, M. F., and Cantley, L. C. (1990) Proc. Natl. Acad. Sci. U.S.A. 87, 1411-1415). The subcellular distribution of PI-3-kinase has not been investigated, and it is unclear if insulin has a stimulatory effect on PI-3-kinase in a nonproliferating target tissue, and, if so, whether this effect is subject to counter-regulation. To address these questions, we studied the effect of insulin on PI-3-kinase activity in isolated rat adipocytes. Activity was measured in plasma membranes, intracellular membranes, and cytosol of control and insulin-treated adipocytes, and in anti-Tyr(P) immunoprecipitates prepared from these fractions and from whole cell lysates. Treatment of adipocytes with insulin (200 nM) caused a half-maximal increase in anti-Tyr(P)-immunoprecipitable PI-3-kinase activity in whole cell lysates within 2 min. This effect was concentration-dependent, and it was sensitive to inhibition by norepinephrine. In insulin-stimulated cells, 75% of anti-Tyr(P)-immunoprecipitable PI-3-kinase activity was found in the low density microsomes. This fraction also exhibited the highest specific activity of PI-3-kinase, and insulin caused a further increase in this activity. Anti-Tyr(P)-immunoprecipitable PI-3-kinase activity was also found in the plasma membranes of insulin-treated cells, but this accounted for only a minor portion of the total and anti-Tyr(P)-immunoprecipitable PI-3-kinase activity. The majority of PI-3-kinase activity (90%) in control cells was cytosolic, but this was not increased in response to insulin nor was it anti-Tyr(P)-immunoprecipitable. These data demonstrate that insulin increases the activity of PI-3-kinase in adipocytes and this effect is subject to inhibition by a physiological antagonist of insulin action. The data also indicate that the effect of insulin to increase PI-3-kinase activity is expressed primarily in the low density intracellular membranes and to a lesser extent in the plasma membranes.