The sphingomyelin derivative ceramide is a signaling molecule implicated in numerous physiological events. Recently published reports indicate that ceramide levels are elevated in insulin-responsive tissues of diabetic animals and that agents which trigger ceramide production inhibit insulin signaling. In the present series of studies, the short-chain ceramide analog C2-ceramide inhibited insulin-stimulated glucose transport by approximately 50% in 3T3-L1 adipocytes, with similar reductions in hormone-stimulated translocation of the insulin-responsive glucose transporter (GLUT4) and insulin-responsive aminopeptidase. C2-ceramide also inhibited phosphorylation and activation of Akt, a molecule proposed to mediate multiple insulin-stimulated metabolic events. C2-ceramide, at concentrations which antagonized activation of both glucose uptake and Akt, had no effect on the tyrosine phosphorylation of insulin receptor substrate 1 (IRS-1) or the amounts of p85 protein and phosphatidylinositol kinase activity that immunoprecipitated with anti-IRS-1 or antiphosphotyrosine antibodies. Moreover, C2-ceramide also inhibited stimulation of Akt by platelet-derived growth factor, an event that is IRS-1 independent. C2-ceramide did not inhibit insulin-stimulated phosphorylation of mitogen-activated protein kinase or pp70 S6-kinase, and it actually stimulated phosphorylation of the latter in the absence of insulin. Various pharmacological agents, including the immunosuppressant rapamycin, the protein synthesis inhibitor cycloheximide, and several protein kinase C inhibitors, were without effect on ceramide's inhibition of Akt. These studies demonstrate ceramide's capacity to inhibit activation of Akt and imply that this is a mechanism of antagonism of insulin-dependent physiological events, such as the peripheral activation of glucose transport and the suppression of apoptosis.