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Tissue-specific knockout (KO) of atypical protein kinase C (aPKC), PKC-λ, yields contrasting phenotypes, depending on the tissue. Thus, whereas muscle KO of PKC-λ impairs glucose transport and causes glucose intolerance, insulin resistance, and liver-dependent lipid abnormalities, liver KO and adipocyte KO of PKC-λ increase insulin sensitivity through salutary alterations in hepatic enzymes. Also note that, although total-body (TB) homozygous KO of PKC-λ is embryonic lethal, TB heterozygous (Het) KO (TBHetλKO) is well-tolerated. However, beneath their seemingly normal growth, appetite, and overall appearance, we found in TBHetλKO mice that insulin receptor phosphorylation and signaling through insulin receptor substrates to phosphatidylinositol 3-kinase, Akt and residual aPKC were markedly diminished in liver, muscle, and adipose tissues, and glucose transport was impaired in muscle and adipose tissues. Furthermore, despite these global impairments in insulin signaling, other than mild hyperinsulinemia, glucose tolerance, serum lipids, and glucose disposal and hepatic glucose output in hyperinsulinemic clamp studies were normal. Moreover, TBHetλKO mice were protected from developing glucose intolerance during high-fat feeding. This metabolic protection (in the face of impaired insulin signaling) in HetλKO mice seemed to reflect a deficiency of PKC-λ in liver with resultant 1) increases in FoxO1 phosphorylation and decreases in expression of hepatic gluconeogenic enzymes and 2) diminished expression of hepatic lipogenic enzymes and proinflammatory cytokines. In keeping with this postulate, adenoviral-mediated supplementation of hepatic PKC-λ induced a diabetic state in HetλKO mice. Our findings underscore the importance of hepatic PKC-λ in provoking abnormalities in glucose and lipid metabolism.