Although the effects of insulin on glucose and lipid metabolism are well documented, gaps remain in our understanding of the precise molecular mechanisms of signal transduction. Recent evidence suggests that compartmentalization of signaling molecules and metabolic enzymes may explain the unique cellular effects of the hormone. Signal initiation from the insulin receptor is restricted in part to caveolae microdomains of the plasma membrane. A fraction of the insulin receptor directly interacts with caveolin, thus directing the protein to caveolae. Following its activation by insulin, the receptor recruits a series of adapter proteins, resulting in the activation of the G protein TC10, which also resides in caveolae. TC10 can influence a number of cellular processes, including changes in the actin cytoskeleton, recruitment of effector including the adapter protein CIP4, and assembly of the exocyst complex. These events play crucial roles in the trafficking, docking and fusion of vesicles containing the insulin-responsive glucose transporter Glut4 at the plasma membrane.