In the liver, insulin suppresses hepatic gluconeogenesis by activating Akt, which inactivates the key gluconeogenic transcription factor FoxO1 (Forkhead Box O1). Recent studies have implicated hyperactivity of the Akt phosphatase Protein Phosphatase 2A (PP2A) and impaired Akt signaling as a molecular defect underlying insulin resistance. We therefore hypothesized that PP2A inhibition would enhance insulin-stimulated Akt activity and decrease glucose production. PP2A inhibitors increased hepatic Akt phosphorylation and inhibited FoxO1 in vitro and in vivo, and suppressed gluconeogenesis in hepatocytes. Paradoxically, PP2A inhibition exacerbated insulin resistance in vivo. This was explained by phosphorylation of both hepatic glycogen synthase (GS) (inactivation) and phosphorylase (activation) resulting in impairment of glycogen storage. Our findings underline the significance of GS and Phosphorylase as hepatic PP2A substrates and importance of glycogen metabolism in acute plasma glucose regulation.