The stimulation of glycogen-targeted protein phosphatase 1 (PP1), glycogen synthase, and glycogen synthesis by insulin was examined during the differentiation of 3T3-L1 fibroblasts into adipocytes. Insulin treatment barely changed the low levels of glycogen synthesis measured in fibroblasts. Following differentiation into adipocytes, insulin increased glycogen synthesis up to 40-fold. After further culturing of the adipocytes for a week, insulin stimulated glycogen accumulation 700-fold. Differentiation of 3T3-L1 cells also resulted in the increased expression of glycogen synthase and in increases in both total glycogen synthase activity and -fold stimulation by insulin. While the levels of PP1 protein were unchanged by differentiation, PP1 specific activity decreased over 60%, although sensitivity to insulin treatment was augmented. Concurrently, levels of the PP1 inhibitor protein DARPP-32 were dramatically induced upon 3T3-L1 adipogenesis. DARPP-32 in both 3T3-L1 and primary rat adipocytes was exclusively localized to the particulate fractions, including the glycogen-enriched pellet. PP1 activity from 3T3-L1 adipocytes exhibited a kinetic lag in vitro, which was not present in fibroblast extracts. Insulin pretreatment of the adipocyte cells overcame the in vitro lag in PP1 activity, resulting in up to 5-fold stimulation of PP1 activity being measured at early assay time points. These results suggest that in 3T3-L1 adipocytes, DARPP-32 may maintain glycogen-targeted PP1 activity in a low basal state, priming the phosphatase for stimulation by insulin.Protein phosphorylation plays a critical role in the regulation of lipid and glucose metabolism (1). As the major anabolic hormone regulating glucose utilization and storage, insulin exerts many of its effects by promoting the net dephosphorylation of enzymes such as glycogen synthase, glycogen phosphorylase, and phosphorylase kinase, resulting in the stimulation of glycogen synthesis. Several lines of evidence indicate that these insulin-stimulated dephosphorylations are catalyzed by protein phosphatase 1 (PP1).1 This phosphatase is found in nearly all cellular compartments and is thought to be targeted intracellularly by specific proteins (2, 3). Such targeting proteins have been identified that localize PP1 to the nucleus (4), the sarcoplasmic reticulum (5), glycogen, and myofibrils (reviewed in Ref. 3). The best characterized of these are the mammalian glycogen-targeting proteins. Three related members have been described: G M , isolated from skeletal muscle (6, 7), the hepatic G L protein (8, 9), and the recently cloned PTG protein (10, 11). Unlike the extremely restricted expression of G M and G L , PTG is highly expressed in the major insulinresponsive tissues, including fat, skeletal muscle, heart, and liver. 2 PP1 activity is controlled by targeting proteins in several ways. First, by localizing PP1 to subcellular compartments, such as glycogen, targeting proteins serve to increase PP1 specific activity against co-localized substrates. The two glycogen-ta...