Selected candidate genes have been analyzed in the Pima Indians of Arizona based on evidence that insulin resistance and type 2 diabetes have significant genetic determinants. An amino acid substitution at codon 905 of the glycogen-targeting subunit of type 1 protein phosphatase that regulates skeletal muscle glycogenesis was recently reported to be associated with changes in insulin action in Danish subjects. In addition to the variant at 905, we report here a novel substitution at codon 883 and common variant of an "ATTTA" element in the 3'-untranslated region (UTR) of the corresponding gene (PPP1R3). The 3'-UTR variant resembled the mRNA-destabilizing AT(AU)-rich elements (AREs) and resulted in a 10-fold difference in reporter mRNA half-life, was correlated with PPP1R3 transcript and protein concentrations in vivo, and was associated with insulin resistance and type 2 diabetes in the Pimas. The variant is more common in Pimas (0.56) than in Caucasians (0.40). Because of its apparent effect on expression of PPP1R3, it may, in part, contribute to the higher prevalence of type 2 diabetes in this Native American population.