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Short-term muscle denervation is a reproducible model of tissue-specific insulin resistance. To investigate the molecular basis of insulin resistance in denervated muscle, the downstream signaling molecules of the insulin-signaling pathway were examined in intact and denervated soleus muscle of rats. Short-term denervation induced a significant fall in glucose clearance rates (62% of control, P < 0.05) as detected by euglycemic hyperinsulinemic clamp and was associated with a significant decrease in insulin-stimulated tyrosine phosphorylation of the insulin receptor (IR; 73% of control, P < 0.05), IR substrate 1 (IRS1; 69% of control, P < 0.05), and IRS2 (82% of control, P < 0.05) and serine phosphorylation of Akt (39% of control, P < 0.05). Moreover, denervation reduced insulin-induced association between IRS1/IRS2 and p85/ phosphatidylinositol (PI) 3-kinase. Nevertheless, denervation caused an increase in PI 3-kinase activity associated with IRS1 (275%, P < 0.05) and IRS2 (180%, P < 0.05), but the contents of phosphorylated PI detected by HPLC were significantly reduced in lipid fractions. In the face of the apparent discrepancy, we evaluated the expression and activity of the 5-inositol, lipid phosphatase SH2 domain-containing inositol phosphatase (SHIP2), and the serine phosphorylation of p85/PI 3-kinase. No major differences in SHIP2 expression were detected between intact and denervated muscle. However, serine phosphorylation of p85/PI 3-kinase was reduced in denervated muscle, whereas the blockade of SHIP2 expression by antisense oligonucleotide treatment led to partial restoration of phosphorylated PI contents and to improved glucose uptake. Thus modulation of the functional status of SHIP2 may be a major mechanism of insulin resistance induced by denervation. denervation; SH2 domain-containing inositol phosphatase; phosphatidylinositol 3-kinase