Conditions such as acidosis, uremia, and sepsis are characterized by insulin resistance and muscle wasting, but whether the insulin resistance associated with these disorders contributes to muscle atrophy is unclear. We examined this question in db/db mice with increased blood glucose despite high levels of plasma insulin. Compared with control littermate mice, the weights of different muscles in db/db mice and the cross-sectional areas of muscles were smaller. In muscle of db/db mice, protein degradation and activities of the major proteolytic systems, caspase-3 and the proteasome, were increased. We examined signals that could activate muscle proteolysis and found low values of both phosphatidylinositol 3 kinase (PI3K) activity and phosphorylated Akt that were related to phosphorylation of serine 307 of insulin receptor substrate-1. To assess how changes in circulating insulin and glucose affect muscle protein, we treated db/db mice with rosiglitazone. Rosiglitazone improved indices of insulin resistance and abnormalities in PI3K/Akt signaling and decreased activities of caspase-3 and the proteasome in muscle leading to suppression of proteolysis. Underlying mechanisms of proteolysis include increased glucocorticoid production, decreased circulating adiponectin, and phosphorylation of the forkhead transcription factor associated with increased expression of the E3 ubiquitin-conjugating enzymes atrogin-1/MAFbx and MuRF1. These abnormalities were also corrected by rosiglitazone. Thus, insulin resistance causes muscle wasting by mechanisms that involve suppression of PI3K/Akt signaling leading to activation of caspase-3 and the ubiquitin-proteasome proteolytic pathway causing muscle protein degradation.