Abstract: Much remains unknown about the underlying molecular mechanisms that cause insulin resistance at the center of the current pandemic of obesity, metabolic syndrome, and type 2 diabetes. However, a growing body of data suggests that abnormal cellular cholesterol levels contribute to reduced insulin response, increased blood glucose and eventually hyperinsulinemia. I will present studies in support of the concept that excess cholesterol is a casual risk factor for insulin resistance by maintaining active the phosphatase responsible for the inactivation of the insulin receptor. I will shed light on a novel mechanism to reduce protein tyrosine phosphatases that could provide a mechanistic framework for the development of specific activators for members of this class of proteins.