Insulin resistance, an important feature of type 2 diabetes, is manifested as attenuated insulin receptor (IR) signaling in response to insulin binding. A drug that promotes the initiation of LR signaling by enhancing IR autophosphorylation should, therefore, be useful for treating type 2 diabetes. This report describes the effect of a small molecule IR sensitizer, TLK16998, on IR signaling. This compound activated the tyrosine kinase domain of the IR beta -subunit at concentrations of 1 mu mol/l or less but had no effect on insulin binding to the IR alpha -subunit even at much higher concentrations. TLK16998 alone had no effect on IR signaling in mouse 3T3-L1 adipocytes but, at concentrations as low as 3.2 mu mol/l, enhanced the effects of insulin on the phosphorylation of the IR beta -subunit and IR substrate 1, and on the amount of phosphatidylinositol 3-kinase that coimmunoprecipitated with IRS-1. Phosphopeptide mapping revealed that the effect of TLK16998 on the IR was associated with increased tyrosine phosphorylation of the activation loop of the beta -subunit tyrosine kinase domain. TLK16998 also increased the potency of insulin in stimulating 2-deoxy-D-glucose uptake in 3T3-L1 adipocytes, with a detectable effect at 8 mu mol/l and a 10-fold increase at 40 mu mol/l. In contrast, only small effects were observed on IGF-1-stimulated a-deoxy-D-glucose uptake. In diabetic mice, TLK16998, at a dose of 10 mg/kg, lowered blood glucose levels for up to 6 h. These results suggest, therefore, that small nonpeptide molecules that directly sensitize the IR may be useful for treating type 2 diabetes.