The role of adenosine receptor in regulation of insulin-induced activation of phosphoinositide 3-kinase (PI 3-kinase) and protein kinase B was studied in isolated rat adipocytes. Rat adipocytes are known to spontaneously release adenosine, which in turn binds and stimulates the adenosine A1 receptors on the cells. In the present study, we observed that degradation of this adenosine by adenosine deaminase attenuated markedly the insulin-induced accumulation of phosphatidylinositol 3,4,5-trisphosphate (PtdIns(3,4,5)P3), a product of PI 3-kinase. p-Aminophenylacetyl xanthine amine congener (PAPA-XAC), an inhibitor of the adenosine A1 receptor, also inhibited the insulin-induced PtdIns(3,4,5)P3 accumulation. When extracellular adenosine was inactivated by adenosine deaminase, phenylisopropyladenosine, an adenosine A1 receptor agonist, potentiated the insulin-induced accumulation of PtdIns(3,4,5)P3. Insulin-induced activation of protein kinase B, the activity of which is controlled by the lipid products of PI 3-kinase, was also potentiated by adenosine. Prostaglandin E2, another activator of a pertussis toxin-sensitive GTP-binding protein in these cells, potentiated the insulin actions. Thus, the receptors coupling to the GTP-binding protein were found to positively regulate the production of PtdIns(3,4,5)P3, a putative second messenger for insulin actions, in physiological target cells of insulin.