Insulin controls target cells by binding to its cell surface receptor. The further intracellular transmission of the insulin signal involves phosphorylation of the receptor as well as other proteins, in particular the insulin receptor substrate (IRS), 1 on specific tyrosine residues. After tyrosine phosphorylation IRS is recognized by Src homology 2 domain-containing proteins for metabolic and glucose transport control, or activation of the mitogen-activated protein kinase (MAP kinase) pathway and mitogenic control (1-4). In type 2 diabetes target cells of the hormone are not fully responsive, which is compensated temporarily by enhanced insulin secretion. The pathogenic mechanisms for this insulin resistance are not known, but an important common feature appears to be a reduced activation/ tyrosine phosphorylation of IRS-1 (5).The insulin receptors are sequestered in the caveolae microdomains of the plasma membrane in adipocytes, and caveolae appear to be critical for insulin control (6). By thin-section electron microscopy, caveolae appear as omega-shaped invaginations of 50 -100 nm diameter in the plasma membrane (7). Caveolae invaginations are found in the plasma membrane of many cell types, but are particularly abundant in adipocytes where they increase in number in conjunction with the differentiation of 3T3-L1 fibroblasts to mature adipocytes (8 -10). Caveolae are involved in receptor-mediated uptake of solutes into the cytosol (11) and in transcytosis (12). A number of proteins, in addition to the insulin receptor, involved in signal transduction are localized to caveolae, which suggests that they may be involved in cellular signaling and control (reviewed in Refs. 13-16).Caveolae are rich in cholesterol and sphingolipids. Caveolae may indeed form from cholesterol-and sphingolipid-rich rafts in the membrane in a process requiring the caveolae-specific structural protein caveolin. Caveolin is found in the plasma membrane and intracellularly, but in the plasma membrane is confined to caveolae; it is therefore used as a marker for these structures. The function of caveolae is dependent on a sufficient level of cholesterol in the plasma membrane and caveolae (12,17). We have also demonstrated a critical dependence of the insulin receptor signal transduction on cholesterol; depletion of cholesterol from the plasma membrane of rat adipocytes reversibly inhibited insulin stimulation of glucose transport and metabolic protein phosphorylation control (6). The importance of caveolae for insulin receptor signaling is further indicated by a consensus binding site for interaction with caveolin (18), and coprecipitation of the receptor with caveolin (4) indicates that the interaction may be physiological. Moreover, the insulin receptor appears to phosphorylate caveolin (19), whereas caveolin was shown to activate the isolated receptor, although the physiological relevance of this is not known (20).Herein we examine in detail the dependence of the insulin receptor on caveolae for signal transduction: the effects of cho...