A growing body of evidence implicates ceramide and/or its glycosphingolipid metabolites in the pathogenesis of insulin resistance. We have developed a highly specific small molecule inhibitor of glucosylceramide synthase, an enzyme that catalyzes a necessary step in the conversion of ceramide to glycosphingolipids. In cultured 3T3-L1 adipocytes, the iminosugar derivative N-(5′-adamantane-1′-yl-methoxy)-pentyl-1-deoxynojirimycin (AMP-DNM) counteracted tumor necrosis factor-α–induced abnormalities in glycosphingolipid concentrations and concomitantly reversed abnormalities in insulin signal transduction. When administered to mice and rats, AMP-DNM significantly reduced glycosphingolipid but not ceramide concentrations in various tissues. Treatment of ob/ob mice with AMP-DNM normalized their elevated tissue glucosylceramide levels, markedly lowered circulating glucose levels, improved oral glucose tolerance, reduced A1C, and improved insulin sensitivity in muscle and liver. Similarly beneficial metabolic effects were seen in high fat–fed mice and ZDF rats. These findings provide further evidence that glycosphingolipid metabolites of ceramide may be involved in mediating the link between obesity and insulin resistance and that interference with glycosphingolipid biosynthesis might present a novel approach to the therapy of states of impaired insulin action such as type 2 diabetes.