To investigate the role of insulin receptor substrate-1 (IRS-1) and its downstream signaling in insulin-induced thermogenic differentiation of brown adipocytes, we have reconstituted IRS-1-deficient fetal brown adipocytes (IRS-1(-/-)) with wild-type IRS-1 (IRS-1(wt)). The lack of IRS-1 resulted in the inability of insulin to induce IRS-1-associated phosphatidylinositol 3-kinase (PI 3-kinase) activity and Akt phosphorylation in IRS-1(-/-) brown adipocytes. In addition, these cells showed an impairment in activating alpha-Akt, beta-Akt, and gamma-Akt isoforms upon insulin stimulation. Reconstitution of IRS-1(-/-) brown adipocytes with IRS-1(wt) restored the IRS-1/PI 3-kinase/Akt signaling pathway. Treatment of wild-type brown adipocytes with insulin for 24 h up-regulated uncoupling protein-1 (UCP-1) expression and transactivated the UCP-1 promoter; this effect was abolished in the absence of IRS-1 or in the presence of an Akt inhibitor and further recovered after IRS-1(wt) reconstitution. Neither UCP-2 nor UCP-3 was up-regulated by insulin in wild-type and IRS-1-deficient brown adipocytes. Insulin stimulated the expression of CCAAT/enhancer-binding protein alpha (C/EBPalpha) and its DNA binding activity in wild-type brown adipocytes but not in IRS-1(-/-) cells. However, insulin stimulation of both C/EBPalpha expression and binding activity was restored after IRS-1(wt) reconstitution of deficient cells. Retrovirus-mediated expression of C/EBPalpha and peroxisome proliferator-activated receptor gamma in IRS-1(-/-) brown adipocytes up-regulated UCP-1 protein content and transactivated UCP-1 promoter regardless of insulin stimulation. Both C/EBPalpha and peroxisome proliferator-activated receptor gamma reconstituted FAS mRNA expression, but only C/EBPalpha restored insulin sensitivity in the absence of IRS-1. Finally, reconstitution of IRS-1(-/-) brown adipocytes with the IRS-1 mutants IRS-1(Phe-895), which lacks IRS-1/growth factor receptor binding protein 2 binding but not IRS-1/p85-PI 3-kinase binding, or with IRS-1(Tyr-608/Tyr-628/Tyr-658), which only binds p85-PI 3-kinase, induced UCP-1 expression and transactivated the UCP-1 promoter. These data provide strong evidence for an essential role of IRS-1 through the PI 3-kinase/Akt signaling pathway inducing UCP-1 gene expression by insulin.