Angiotensin II has been shown to contribute to the pathogenesis of insulin resistance; however, the mechanism is not well understood. The present study was undertaken to investigate the potential effect of an angiotensin II type-1 (AT1) receptor blocker, valsartan, to improve insulin resistance and to explore the signaling basis of cross-talk of the AT1 receptor- and insulin-mediated signaling in type 2 diabetic KK-Ay mice. Treatment of KK-Ay mice with valsartan at a dose of 1 mg/kg per day, which did not influence systolic blood pressure, significantly increased insulin-mediated 2-[3H]deoxy-d-glucose (2-[3H]DG) uptake into skeletal muscle and attenuated the increase in plasma glucose concentration after a glucose load and plasma concentrations of glucose and insulin. In contrast, insulin-mediated 2-[3H]DG uptake into skeletal muscle was not influenced in AT2 receptor null mice, and an AT2 receptor blocker, PD123319, did not affect 2-[3H]DG uptake and superoxide production in skeletal muscle of KK-Ay mice. Moreover, we observed that valsartan treatment exaggerated the insulin-induced phosphorylation of IRS-1, the association of IRS-1 with the p85 regulatory subunit of phosphoinositide 3 kinase (PI 3-K), PI 3-K activity, and translocation of GLUT4 to the plasma membrane. It also reduced tumor necrosis factor-alpha (TNF-alpha) expression and superoxide production in skeletal muscle of KK-Ay mice. Specific AT1 receptor blockade increases insulin sensitivity and glucose uptake in skeletal muscle of KK-Ay mice via stimulating the insulin signaling cascade and consequent enhancement of GLUT4 translocation to the plasma membrane.