Both hyperglycemia and tumor necrosis factor alpha (TNF alpha) were found to induce insulin resistance at the level of the insulin receptor (IR), How this effect is mediated is, however, not understood. We investigated whether oxidative stress and production of hydrogen peroxide could be a common mediator of the inhibitory effect, We report here that micromolar concentrations of H2O2 dramatically inhibit insulin-induced IR tyrosine phosphorylation (pretreatment with 500 mu M H2O2 for 5 min inhibits insulin-induced IR tyrosine phosphorylation to 8%), insulin receptor substrate 1 phosphorylation, as well as insulin downstream signaling such as activation of phosphatidylinositol 3-kinase (inhibited to 57%), glucose transport (inhibited to 36%), and mitogen-activated protein kinase activation (inhibited to 7.2%). Both sodium orthovanadate, a selective inhibitor of tyrosine-specific phosphatases, as well as the protein kinase C inhibitor Go6976 reduced the inhibitory effect of hydrogen peroxide on IR tyrosine phosphorylation, To investigate whether H2O2 is involved in hyperglycemia- and/or TNF alpha-induced insulin resistance, we preincubated the cells with the H2O2 scavenger catalase prior to incubation with 25 mM glucose, 25 mM 2-deoxyglucose, 5.7 nM TNF alpha, or 500 mu m H2O2, respectively, and subsequent insulin stimulation. Whereas catalase treatment completely abolished the inhibitory effect of H2O2 and TNF alpha on insulin receptor autophosphorylation, it did not reverse the inhibitory effect of hyperglycemia. In conclusion, these results demonstrate that hydrogen peroxide at low concentrations is a potent inhibitor of insulin signaling and may be involved in the development of insulin resistance in response to TNF alpha.