Insulin-regulated stimulation of glucose entry and mobilization of fat/muscle-specific glucose transporter GLUT4 onto the cell surface require the phosphatidylinositol 3,5-bisphosphate (PtdIns(3,5)P(2)) pathway for optimal performance. The reduced insulin responsiveness observed under ablation of the PtdIns(3,5)P(2)-synthesizing PIKfyve and its associated activator ArPIKfyve in 3T3L1 adipocytes suggests that dysfunction of the PtdIns(3,5)P(2)-specific phosphatase Sac3 may yield the opposite effect. Paradoxically, as uncovered recently, in addition to turnover Sac3 also supports PtdIns(3,5)P(2) biosynthesis by allowing optimal PIKfyve-ArPIKfyve association. These opposing inputs raise the key question as to whether reduced Sac3 protein levels and/or hydrolyzing activity will produce gain in insulin responsiveness. Here we report that small interfering RNA-mediated knockdown of endogenous Sac3 by approximately 60%, which resulted in a slight but significant elevation of PtdIns(3,5)P(2) in 3T3L1 adipocytes, increased GLUT4 translocation and glucose entry in response to insulin. In contrast, ectopic expression of Sac3(WT), but not phosphatase-deficient Sac3(D488A), reduced GLUT4 surface abundance in the presence of insulin. Endogenous Sac3 physically assembled with PIKfyve and ArPIKfyve in both membrane and soluble fractions of 3T3L1 adipocytes, but this remained insulin-insensitive. Importantly, acute insulin markedly reduced the in vitro C8-PtdIns(3,5)P(2) hydrolyzing activity of Sac3. The insulin-sensitive Sac3 pool likely controls a discrete PtdIns(3,5)P(2) subfraction as the high pressure liquid chromatography-measurable insulin-dependent elevation in total [(3)H]inositol-PtdIns(3,5)P(2) was minor. Together, our data identify Sac3 as an insulin-sensitive phosphatase whose down-regulation increases insulin responsiveness, thus implicating Sac3 as a novel drug target in insulin resistance.