Cellular responses are determined by a number of signaling cues in the local microenvironment, such as growth factors and extracellular matrix (ECM). In cultures of mammary epithelial cells (MECs), functional differentiation requires at least two types of signal, lactogenic hormones (i.e., prolactin, insulin, and hydrocortisone) and the specialized ECM, basement membrane (BM). Our previous work has shown that ECM affects insulin signaling in mammary cells. Cell adhesion to BM promotes insulin-stimulated tyrosine phosphorylation of insulin receptor substrate-1 (IRS-1) and association of PI3K with IRS-1, whereas cells cultured on stromal ECM are inefficient in transducing these post-receptor events. Here we examine the mechanisms underlying ECM control of IRS phosphorylation. Compared to cells cultured on BM, cells on plastic exhibit higher level of RhoA activity. The amount and the activity of Rho kinase (Rok) associated with IRS-1 are greater in these cells, leading to serine phosphorylation of IRS-1. Expression of dominant negative RhoA and the application of Rok inhibitor Y27632 in cells cultured on plastic augment tyrosine phosphorylation of IRS-1. Conversely, expression of constitutively active RhoA in cells cultured on BM impedes insulin signaling. These data indicate that RhoA/Rok is involved in substratum-mediated regulation of insulin signaling in MECs, and under the conditions where proper adhesion to BM is missing, such as after wounding and during mammary gland involution, insulin-mediated cellular differentiation and survival would be defective.