SH2-containing inositol phosphatase 2 (SHIP2) is a physiologically important negative regulator of insulin signaling by hydrolyzing the phosphatidylinositol (PI) 3-kinase product PI 3,4,5-trisphosphate in the target tissues of insulin. Targeted disruption of the SHIP2 gene in mice resulted in increased insulin sensitivity without affecting biological systems other than insulin signaling. Therefore, we investigated the molecular mechanisms by which SHIP2 specifically regulates insulin-induced metabolic signaling in 3T3-L1 adipocytes. Insulin-induced phosphorylation of Akt, one of the molecules downstream of PI3-kinase, was inhibited by expression of wild-type SHIP2, whereas it was increased by expression of 5'-phosphatase-defective (DeltaIP) SHIP2 in whole cell lysates. The regulatory effect of SHIP2 was mainly seen in the plasma membrane (PM) and low density microsomes but not in the cytosol. In this regard, following insulin stimulation, a proportion of Akt2, and not Akt1, appeared to redistribute from the cytosol to the PM. Thus, insulin-induced phosphorylation of Akt2 at the PM was predominantly regulated by SHIP2, whereas the phosphorylation of Akt1 was only minimally affected. Interestingly, insulin also elicited a subcellular redistribution of both wild-type and DeltaIP-SHIP2 from the cytosol to the PM. The degree of this redistribution was inhibited in part by pretreatment with PI3-kinase inhibitor. Although the expression of a constitutively active form of PI3-kinase myr-p110 also elicited a subcellular redistribution of SHIP2 to the PM, expression of SHIP2 appeared to affect the myr-p110-induced phosphorylation, and not the translocation, of Akt2. Furthermore, insulin-induced phosphorylation of Akt was effectively regulated by SHIP2 in embryonic fibroblasts derived from knockout mice lacking either insulin receptor substrate-1 or insulin receptor substrate-2. These results indicate that insulin specifically stimulates the redistribution of SHIP2 from the cytosol to the PM independent of 5'-phosphatase activity, thereby regulating the insulin-induced translocation and phosphorylation of Akt2 at the PM.