Insulin receptor substrate-1 (IRS-1) is a major substrate of the insulin receptor and acts as a docking protein for Src homology 2 domain containing signaling molecules that mediate many of the pleiotropic actions of insulin. Insulin stimulation elicits serine/threonine phosphorylation of IRS-1, which produces a mobility shift on SDS-PAGE, followed by degradation of IRS-1 after prolonged stimulation. We investigated the molecular mechanisms and the functional consequences of these phenomena in 3T3-L1 adipocytes. PI 3-kinase inhibitors or rapamycin, but not the MEK inhibitor, blocked both the insulin-induced electrophoretic mobility shift and degradation of IRS-1. Adenovirus- mediated expression of a membrane-targeted form of the p110 subunit of phosphatidylinositol (PI) 3-kinase (p110^CAAX) induced a mobility shift and degradation of IRS-1, both of which were inhibited by rapamycin. Lactacystin, a specific proteasome inhibitor, inhibited insulin-induced degradation of IRS-1 without any effect on its electrophoretic mobility. Inhibition of the mobility shift did not significantly affect tyrosine phosphorylation of IRS-1 or downstream insulin signaling. In contrast, blockade of IRS-1 degradation resulted in sustained activation of Akt, p70 S6 kinase, and mitogen-activated protein (MAP) kinase during prolonged insulin treatment. These results indicate that insulin-induced serine/threonine phosphorylation and degradation of IRS-1 are mediated by a rapamycin-sensitive pathway, which is downstream of PI 3-kinase and independent of ras/MAP kinase. The pathway leads to degradation of IRS-1 by the proteasome, which plays a major role in down-regulation of certain insulin actions during prolonged stimulation.