The ability of insulin to promote the phosphorylation of some proteins and the dephosphorylation of others is paradoxical. An insulin-stimulated protein kinase is shown to activate the type-1 protein phosphatase that controls glycogen metabolism, by phosphorylating its regulatory subunit at a specific serine. Furthermore, the phosphorylation of this residue is stimulated by insulin in vivo. Increased and decreased phosphorylation of proteins by insulin can therefore be explained through the same basic underlying mechanism.