We have examined the effect of in vitro hyperinsulinemia on insulin binding, glucose transport, and insulin degradation in isolated rat adipocytes. When cells were incubated with insulin for 2 or 4 h at 37 degrees C, followed by washing in insulin-free buffer to remove extracellular and receptor-bound insulin, a time and dose-dependent decrease in insulin receptors was observed, which was accompanied by a reduced ability of cells to degrade insulin. Furthermore, the quantitatively predicted rightward shift in the insulin-glucose transport dose-response curve could be demonstrated. In addition to this reduction in insulin sensitivity, a striking decrease in maximal insulin-stimulated glucose transport was observed in the 4-h insulin-treated cells, indicating an abnormality distal to the insulin receptor. Thus, in vitro insulin-induced insulin resistance in adipocytes is caused by both receptor and postreceptor abnormalities. The post-receptor defect is most likely at the level of the glucose transport system per se because the insulinlike agents, spermine and antiinsulin receptor antibodies, also had a markedly reduced ability to stimulate glucose transport in 4-h insulin-treated cells. On the other hand, when cells were incubated with 100 ng/ml insulin for up to 4 h, after which time 2-deoxy glucose uptake was measured without removing buffer insulin or allowing receptor-bound insulin to dissociate, no decrease in maximal insulin-stimulated glucose transport was found. In conclusion, (a) insulin leads to a dose-dependent loss of insulin receptors in freshly isolated adipocytes accompanied by the predicted functional consequence of decreased receptors, i.e., a rightward shift in the insulin-glucose transport dose-response curve, (b) prolonged incubation with insulin causes a marked postreceptor defect in the glucose transport system, (c) maintenance of the activated state of the glucose transport system prevents the expression of the post-receptor defect, (d) the location of the postreceptor abnormality is most likely in the glucose transport system per se, and (e) insulin-induced receptor loss is accompanied by a decrease in insulin degradation.