Obesity, the metabolic syndrome, and type 2 diabetes mellitus (T2DM) are major global health problems. Insulin resistance is frequently present in these disorders, but the causes and effects of such resistance are unknown. Here, we generated mice with muscle-specific knockout of the major murine atypical PKC (aPKC), PKC-lambda, a postulated mediator for insulin-stimulated glucose transport. Glucose transport and translocation of glucose transporter 4 (GLUT4) to the plasma membrane were diminished in muscles of both homozygous and heterozygous PKC-lambda knockout mice and were accompanied by systemic insulin resistance; impaired glucose tolerance or diabetes; islet beta cell hyperplasia; abdominal adiposity; hepatosteatosis; elevated serum triglycerides, FFAs, and LDL-cholesterol; and diminished HDL-cholesterol. In contrast to the defective activation of muscle aPKC, insulin signaling and actions were intact in muscle, liver, and adipocytes. These findings demonstrate the importance of aPKC in insulin-stimulated glucose transport in muscles of intact mice and show that insulin resistance and resultant hyperinsulinemia owing to a specific defect in muscle aPKC is sufficient to induce abdominal obesity and other lipid abnormalities of the metabolic syndrome and T2DM. These findings are particularly relevant because humans who have obesity, impaired glucose tolerance, and T2DM reportedly have defective activation and/or diminished levels of muscle aPKC.