Activation of PKCtheta is associated with lipid-induced insulin resistance and PKCtheta knockout mice are protected from the lipid-induced defects. However, the exact mechanism by which PKCtheta contributes to insulin resistance is not known. To investigate whether an increase in PKCtheta expression leads to insulin resistance, C2C12 skeletal muscle cells were transfected with PKCtheta DNA and treated with different concentrations of insulin for 10 min. PKCtheta overexpression induced reduction of IRS-1 protein levels with a decrease in insulin-induced p85 binding to IRS-1, phosphorylation of PKB and its substrates, p70 and GSK3. Pretreatment of these cells with GF-109203X (a non-specific PKC inhibitor, IC50 for PKCtheta = 10 nM) recovered insulin signaling. PKCtheta was found to be expressed in liver and treatment of human hepatoma cells (HepG2) with high insulin and glucose resulted in an increase in PKCtheta expression that correlated with a decrease in IRS-1 protein levels and the development of insulin resistance. Reduction of PKCtheta expression using RNAi technology significantly inhibited the degradation of IRS-1 and enhanced insulin-induced IRS-1 tyrosine phosphorylation, p85 association to IRS-1 and PKB phosphorylation. In conclusion, by overexpressing PKCtheta or using RNAi technology to downregulate PKCtheta, we have demonstrated that PKCtheta has a key role in the development of insulin resistance. These findings suggest that PKCtheta mediates not only insulin resistance in muscle but also in liver, which may contribute to the development of whole body insulin resistance and diabetes.