The Ser/Thr phosphorylation of insulin receptor substrate 1 (IRS) is one key mechanism to stimulate and/or attenuate insulin signal transduction. Using a phospho-specific polyclonal antibody directed against phosphorylated Ser 318 of IRS-1, we found a rapid and transient insulin-stimulated phosphorylation of Ser 318 in human and rodent skeletal muscle cell models and in muscle tissue of insulin-treated mice. None of the investigated insulin resistanceassociated factors (e.g. high glucose, tumor necrosis factor-␣, adrenaline) stimulated the phosphorylation of Ser 318 . Studying the function of this phosphorylation, we found that replacing Ser 318 by alanine completely prevented both the attenuation of insulin-stimulated Akt/protein kinase B Ser 473 phosphorylation and glucose uptake after 60 min of insulin stimulation. Unexpectedly, after acute insulin stimulation, we observed that phosphorylation of Ser 318 is not inhibitory but rather enhances insulin signal transduction because introduction of Ala 318 led to a reduction of the insulinstimulated Akt/protein kinase B phosphorylation. Furthermore, replacing Ser 318 by glutamate, i.e. mimicking phosphorylation, improved glucose uptake after acute insulin stimulation. These data suggest that phosphorylation of Ser 318 is not per se inhibitory but is necessary to trigger the attenuation of the insulin-stimulated signal in skeletal muscle cells. Investigating the molecular mechanism of insulin-stimulated Ser 318 phosphorylation, we found that phosphatidylinositol 3-kinase-mediated activation of atypical protein kinase C-and recruitment of protein kinase C-to IRS-1 was responsible for this phosphorylation. We conclude that Ser 318 phosphorylation of IRS-1 is an early physiological event in insulin-stimulated signal transduction, which attenuates the continuing action of insulin.