Disruption of the PPP1R3A gene encoding the glycogen targeting subunit (G_M/R_GL) of protein phosphatase 1 (PP1) causes substantial lowering of the glycogen synthase activity and a 10-fold decrease in the glycogen levels in skeletal muscle. Homozygous G_M^−/− mice show increased weight gain after 3 months of age and become obese, weighing ∼20% more than their wild-type (WT) littermates after 12 months of age. Glucose tolerance is impaired in 11-month-old G_M^−/− mice, and their skeletal muscle is insulin-resistant at ≥12 months of age. The massive abdominal and other fat depositions observed at this age are likely to be a consequence of impaired blood glucose utilization in skeletal muscle. PP1-G_M activity, assayed after specific immunoadsorption, was absent from G_M^−/− mice and stimulated in the hind limb muscles of WT mice by intravenous infusion of insulin. PP1-R5/PTG, another glycogen targeted form of PP1, was not significantly stimulated by insulin in the skeletal muscle of WT mice but showed compensatory stimulation by insulin in G_M^−/− mice. Our results suggest that dysfunction of PP1-G_M may contribute to the pathophysiology of human type 2 diabetes.