Activation of protein kinase C (PKC) in vascular tissue is associated with endothelial dysfunction and insulin resistance. However, the effect of vascular PKC activation on insulin-stimulated endothelial nitric oxide (NO) synthase (eNOS) regulation has not been characterized in obesity-associated insulin resistance. Diacylglycerol (DAG) concentration and PKC activity were increased in the aorta of Zucker fatty compared with Zucker lean rats. Insulin-stimulated increases in Akt phosphorylation and cGMP concentration (a measure of NO bioavailability) after euglycemic-hyperinsulinemic clamp were blunted in the aorta of fatty compared with lean rats but were partly normalized after 2 weeks of treatment with the PKCbeta inhibitor ruboxistaurin (LY333531). In endothelial cell culture, overexpression of PKCbeta1 and -beta2, but not PKCalpha, -delta, or -zeta, decreased insulin-stimulated Akt phosphorylation and eNOS expression. Overexpression of PKCbeta1 and -beta2, but not PKCalpha or -delta, also decreased Akt phosphorylation stimulated by vascular endothelial growth factor (VEGF). In microvessels isolated from transgenic mice overexpressing PKCbeta2 only in vascular cells, Akt phosphorylation stimulated by insulin was decreased compared with wild-type mice. Thus, activation of PKCbeta in endothelial cells and vascular tissue inhibits Akt activation by insulin and VEGF, inhibits Akt-dependent eNOS regulation by insulin, and causes endothelial dysfunction in obesity-associated insulin resistance.