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Insulin stimulates tyrosine phosphorylation of insulin receptor substrate 1 (IRS-1), which in turn binds to and activates phosphatidylinositol 3-kinase (PI 3-kinase). In the present study, we have examined these processes in animal models of insulin-resistant and insulin-deficient diabetes mellitus. After in vivo insulin stimulation, there was a 60-80% decrease in IRS-1 phosphorylation in liver and muscle of the ob/ob mouse. There was no insulin stimulation of PI 3-kinase (85 kD subunit) association with IRS-1, and IRS-1-associated PI 3-kinase activity was reduced 90%. Insulin-stimulated total PI 3-kinase activity was also absent in both tissues of the ob/ob mouse. By contrast, in the streptozotocin diabetic rat, IRS-1 phosphorylation increased 50% in muscle, IRS-1-associated PI 3-kinase activity was increased two- to threefold in liver and muscle, and there was a 50% increase in the p85 associated with IRS-1 after insulin stimulation in muscle. In conclusion, (a) IRS-1-associated PI 3-kinase activity is differentially regulated in hyperinsulinemic and hypoinsulinemic diabetic states; (b) PI 3-kinase activation closely correlates with IRS-1 phosphorylation; and (c) reduced PI 3-kinase activity may play a role in the pathophysiology of insulin resistant diabetic states, such as that seen in the ob/ob mouse.