Modulation of the expression of the protein phosphatase-1 (PP1) glycogen-targeting subunit PTG exerts profound effects on cellular glycogen metabolism in vitro and in vivo. PTG contains three distinct binding domains for glycogen, PP1, and a common site for glycogen synthase and phosphorylase. The impact of disrupting the PP1-binding domain on PTG function was examined in 3T3-L1 adipocytes. A full-length PTG mutant was generated as an adenoviral construct in which the valine and phenylalanine residues in the conserved PP1-binding domain were mutated to alanine (PTG-VF). Infection of fully differentiated 3T3-L1 adipocytes with the PTG-VF adenovirus reduced glycogen stores by over 50%. In vitro, PTG-VF competitively interfered with wild-type PTG action, suggesting that the mutant construct acted as a dominant-negative molecule. The reduction in cellular glycogen storage was due to a significantly increased rate of glycogen turnover. Interestingly, acute basal and insulin-stimulated glucose uptake and glycogen synthesis rates were enhanced in PTG-VF expressing cells vs. control 3T3-L1 adipocytes, likely as a compensatory response to the loss of glycogen stores. These results indicate that the mutation of the PP1-binding domain on PTG resulted in the generation of a dominant-negative molecule that impeded endogenous PTG action and reduced cellular glycogen levels, through enhancement of glycogenolysis rather than impairment of glycogen synthesis.