TORC2 is a major transcriptional coactivator for hepatic glucose production. Insulin impedes gluconeogenesis by inhibiting TORC2 via SIK2-dependent phosphorylation at Ser171. Interruption of this process greatly perturbs hepatic glucose metabolism, thus promoting hyperglycemia in rodents. Here, we show that hyperactivation of TORC2 would exacerbate insulin resistance by enhancing expression of LIPIN1, a mammalian phosphatidic acid phosphatase for diacylglycerol (DAG) synthesis. Diet-induced or genetic obesity increases LIPIN1 expression in mouse liver, and TORC2 is responsible for its transcriptional activation. While overexpression of LIPIN1 disturbs hepatic insulin signaling, knockdown of LIPIN1 ameliorates hyperglycemia and insulin resistance by reducing DAG and PKCvarepsilon activity in db/db mice. Finally, TORC2-mediated insulin resistance is partially rescued by concomitant knockdown of LIPIN1, confirming the critical role of LIPIN1 in the perturbation of hepatic insulin signaling. These data propose that dysregulation of TORC2 would further exaggerate insulin resistance and promote type 2 diabetes in a LIPIN1-dependent manner.