Mice that lack acyl CoA:diacylglycerol acyltransferase 1 (DGAT1), a key enzyme in mammalian triglyceride synthesis, have decreased adiposity and increased insulin sensitivity. Here we show that insulin-stimulated glucose transport is increased in the skeletal muscle and white adipose tissue (WAT) of chow-fed DGAT1-deficient mice. This increase in glucose transport correlated with enhanced insulin-stimulated activities of phosphatidylinositol 3-kinase, protein kinase B (or Akt), and protein kinase Cλ (PKC-λ), three key molecules in the insulin-signaling pathway, and was associated with decreased levels of serine-phosphorylated insulin receptor substrate 1 (IRS-1), a molecule implicated in insulin resistance. Similar findings in insulin signaling were also observed in DGAT1-deficient mice fed a high-fat diet. Interestingly, the increased PKC-λ activity and decreased serine phosphorylation of IRS-1 were observed in chow-fed wild-type mice transplanted with DGAT1-deficient WAT, consistent with our previous finding that transplantation of DGAT1-deficient WAT enhances glucose disposal in wild-type recipient mice. Our findings demonstrate that DGAT1 deficiency enhances insulin signaling in the skeletal muscle and WAT, in part through altered expression of adipocyte-derived factors that modulate insulin signaling in peripheral tissues.