Inducible nitric-oxide synthase (iNOS), a major mediator of inflammation, plays an important role in obesity-induced insulin resistance. Inhibition of iNOS by gene disruption or pharmacological inhibitors reverses or ameliorates obesity-induced insulin resistance in skeletal muscle and liver in mice. It is unknown, however, whether increased expression of iNOS is sufficient to cause insulin resistance in vivo. To address this issue, we generated liver-specific iNOS transgenic (L-iNOS-Tg) mice, where expression of the transgene, iNOS, is regulated under mouse albumin promoter. L-iNOS-Tg mice exhibited mild hyperglycemia, hyperinsulinemia, insulin resistance, and impaired insulin-induced suppression of hepatic glucose output, as compared with wild type (WT) littermates. Insulin-stimulated phosphorylation of insulin receptor substrate-1 (IRS-1) and -2, and Akt was significantly attenuated in liver, but not in skeletal muscle, of L-iNOS-Tg mice relative to WT mice without changes in insulin receptor phosphorylation. Moreover, liver-specific iNOS expression abrogated insulin-stimulated phosphorylation of glycogen synthase kinase-3β, forkhead box O1, and mTOR (mammalian target of rapamycin), endogenous substrates of Akt, along with increased S-nitrosylation of Akt relative to WT mice. However, the expression of insulin receptor, IRS-1, IRS-2, Akt, glycogen synthase kinase-3β, forkhead box O1, protein-tyrosine phosphatase-1B, PTEN (phosphatase and tensin homolog), and p85 phosphatidylinositol 3-kinase was not altered by iNOS transgene. Hyperglycemia was associated with elevated glycogen phosphorylase activity and decreased glycogen synthase activity in the liver of L-iNOS-Tg mice, whereas phosphoenolpyruvate carboxykinase, glucose-6-phosphatase, and proliferator-activated receptor γ coactivator-1α expression were not altered. These results clearly indicate that selective expression of iNOS in liver causes hepatic insulin resistance along with deranged insulin signaling, leading to hyperglycemia and hyperinsulinemia. Our data highlight a critical role for iNOS in the development of hepatic insulin resistance and hyperglycemia.