The accumulation of diacylglycerol (DAG) in the liver leads to the activation of protein kinase Cε (PKCε), which subsequently inhibits the insulin receptor kinase. This then leads to decreased insulin-stimulated tyrosine phosphorylation (pY) of insulin receptor substrate 1 and 2 (IRS1, IRS2), resulting in reduced insulin activation of 1-phosphoinositol 3-kinase (PI 3-kinase) and Akt2. Reduced Akt2 activation results in decreased glycogen synthase (GS)-mediated glycogen synthesis and decreased suppression of gluconeogenesis, which in turn leads to glucose release through glucose transporter 2 (GLUT2). FATP5, fatty acid transport protein 5; FOXO, forkhead box protein O; G6Pase, glucose-6-phosphatase; GSK3, glycogen synthase kinase-3; LCoAs, long chain fatty acids; PDK, pyruvate dehydrogenase kinase; PEPCK, phosphoenolpyruvate carboxykinase; PIP2, phosphatidylinositol bisphosphate; PIP3, phosphatidylinositol trisphosphate; PH, pleckstrin homology domain; PTB, phosphotyrosine binding domain; SH2, src homology domain.