Glycogen synthase is an excellent in vitro substrate for protein phosphatase-1 (PP1), which is potently inhibited by the phosphorylated forms of DARPP-32 (dopamine- and cAMP-regulated phosphoprotein, M(r) = 32,000) and Inhibitor-1. To test the hypothesis that the activation of glycogen synthase by insulin is due to a decrease in the inhibition of PP1 by the phosphatase inhibitors, we have investigated the effects of insulin on glycogen synthesis in skeletal muscles from wild-type mice and mice lacking Inhibitor-1 and DARPP-32 as a result of targeted disruption of the genes encoding the two proteins. Insulin increased glycogen synthase activity and the synthesis of glycogen to the same extent in wild-type and knockout mice, indicating that neither Inhibitor-1 nor DARPP-32 is required for the full stimulatory effects of insulin on glycogen synthase and glycogen synthesis in skeletal muscle.