Insulin plays an important role in cell metabolism and proliferation. In the present study, we examined the effect of ethanol on insulin actions such as glucose uptake, DNA synthesis, and c-Jun gene expression. Acute treatment with ethanol (200 mM) for 60 minutes inhibited insulin-stimulated 2-deoxyglucose uptake by 50% in 3T3-L1 adipocytes. Insulin-induced DNA synthesis and c-Jun protein expression were also reduced by ethanol treatment in Rat-1 fibroblasts overexpressing normal human insulin receptor. Ethanol has no effect on tyrosine phosphorylation of the insulin receptor and insulin receptor substrate (IRS)-1. However, association of the insulin receptor and IRS-1 with the Src homology 2 domain of the p85 subunit of phosphatidylinositol 3-kinase (PI3-kinase) was reduced by ethanol. Pretreatment with the antidiabetic drug troglitazone, an insulin-sensitizer, reversed ethanol's inhibition. These results suggest that ethanol specifically inhibits the association of the insulin receptor and IRS-1 with the p85 subunit of PI3-kinase, which is required for increased glucose uptake, DNA synthesis, and c-Jun expression by insulin.