The extent of phosphorylation of protein phosphatase inhibitor-1 in skeletal muscle rose about 2.5-fold during 60 min of perfusion of the rat hemicorpus preparation and then did not change over the following 30 min. Addition of insulin at 60 min resulted in a 35% fall in inhibitor-1 phosphorylation by 90 min. The rise in inhibitor-1 phosphorylation was due to the presence of catecholamines as evidenced by an accumulation of epinephrine in the perfusate. Removal of the adrenal glands or cannulation of the vena cava prevented the accumulation of epinephrine and the rise in inhibitor-1 phosphorylation. Insulin did not alter the phosphorylation state of inhibitor-1 in the presence of the beta-adrenergic antagonist propranolol where the degree of phosphorylation was low (less than 10%) or at concentrations of isoproterenol (10 nM) where inhibitor-1 was highly phosphorylated (greater than 60%). In preparations with the adrenal glands removed, 0.5 nM isoproterenol produced a 2-fold rise in inhibitor-1 phosphorylation, an effect that was completely prevented by the addition of insulin. The antagonism of 0.5 nM idoproterenol by insulin correlated with a decrease in the muscle content of cyclic AMP. These results suggest that the dephosphorylation of inhibitor-1 may play an important role in the metabolic effects of insulin in vivo.