In recent years, the prevalence of obesity and resultant insulin-resistance, which predisposes to both Type 2 Diabetes (T2D) and Non-Alcoholic Fatty Liver Disease (NAFLD), has markedly increased. Despite decades of study, how insulin signaling controls metabolism, and the mechanism by which it is dysregulated in hyperinsulinemic states, remains incompletely understood. Akt is a critical molecular node in insulin’s ability to inhibit gluconeogenesis, through inactivation of FoxOs. In parallel, Akt increases hepatic lipogenesis by stimulatory action on the mTORC1-SREBP1c axis. This leads to an apparent “paradox” whereby in obesity, one insulin-regulated process (inhibition of FoxOs) is repressed whereby another (mTORC1 activation) is accelerated. Both PDK1-mediated Thr308 and mTORC2-mediated Ser473 phosphorylations are required for full activation of Akt, but the mechanisms accounting for termination or negative regulation of Akt signaling are less established. Pleckstrin homology (PH) domain leucine-rich repeat protein phosphatases (PHLPPs) are a recently identified phosphatase family that terminates Akt signaling by dephosphorylation of Ser473. PHLPPs have been shown to suppress Akt-dependent cancer progression, but their potential role in metabolic disease was unknown prior to our recent work showing that liver PHLPP2 protein levels are reduced in diet-induced or genetically (ob/ob) obese mice. Interestingly, transduction of mice with shRNA against PHLPP2 increased insulin sensitivity, mirroring the phenotype of mice with constitutively active Akt activity, proving that PHLPP2 is necessary to terminate insulin signaling. Conversely, adenovirus-mediated rescue of low PHLPP2 levels in obese mice reduced Akt activity, decreased lipogenesis, but remarkably, did not adversely affect glucose tolerance. These data suggest that PHLPP2 plays an important role in regulation of gluconeogenesis and lipogenesis, and may be a novel therapeutic target to dissociate insulin’s protective actions on glucose metabolism and the fatty liver that is prevalent in the hyperinsulinemic state.