Incubation of H-35 cells with 300 ng/ml (50 nM) of insulin causes a 3-4-fold induction of tyrosine aminotransferase at 4-6 h of incubation. At 24 h the activity of transaminase returns to basal levels despite the presence of sufficient insulin to stimulate a maximal response. Furthermore, addition of 300 ng/ml of fresh insulin fails to stimulate the induction of transaminase. In contrast, the addition of 0.1 microM dexamethasone to insulin-treated cells stimulates the induction of tyrosine aminotransferase, indicating that the loss of responsiveness is specific to insulin action. Incubation of H-35 cells with insulin also causes a 25-30% decrease in insulin binding. This modest decrease in receptor binding is not sufficient to explain the virtually complete loss of insulin responsiveness. Hence, in H-35 hepatoma cells insulin-induced desensitization to insulin action is mediated primarily by post-receptor events.