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Obesity contributes to the development of type 2 diabetes, but the underlying mechanisms are poorly understood. Using cell culture and mouse models, we show that obesity causes endoplasmic reticulum (ER) stress. This stress in turn leads to suppression of insulin receptor signaling through hyperactivation of c-Jun N-terminal kinase (JNK) and subsequent serine phosphorylation of insulin receptor substrate–1 (IRS-1). Mice deficient in Xbox–binding protein–1 (XBP-1), a transcription factor that modulates the ER stress response, develop insulin resistance. These findings demonstrate that ER stress is a central feature of peripheral insulin resistance and type 2 diabetes at the molecular, cellular, and organismal levels. Pharmacologic manipulation of this pathway may offer novel opportunities for treating these common diseases. The cluster of pathologies known as metabolic syndrome, including obesity, insulin resistance, type 2 diabetes, and cardiovascular disease, has become one of the most serious threats to human health. The dramatic increase in the incidence of obesity in most parts of the world has contributed to the emergence of this disease cluster, particularly insulin resistance and type 2 diabetes. However, understanding the molecular mechanisms underlying these individual disorders and their links with each other has been challenging. Over the past decade, it has become clear that obesity is associated with the activation of cellular stress signaling and inflammatory pathways (1–4). However, the origin of this stress is not known. A key player in the cellular stress response is the ER, a membranous network that functions in the synthesis and processing of secretory and membrane proteins. Certain pathological stress conditions disrupt ER homeostasis and lead to accumulation of unfolded or misfolded proteins in the ER lumen (5–7). To cope with this stress, cells activate a signal transduction system linking the ER lumen with the cytoplasm and nucleus, called the unfolded protein response (UPR) (5–7). Among the conditions that trigger ER stress are glucose or nutrient deprivation, viral infections, lipids, increased synthesis of secretory proteins, and expression of mutant or misfolded proteins (8–10). Several of these conditions occur in obesity. Specifically, obesity increases the demand on the synthetic machinery of the cells in many secretory organ systems. Obesity is also associated with mechanical stress, excess lipid accumulation, abnormalities in intracellular energy fluxes, and nutrient availability. In light of these observations, we postulated that obesity may be a chronic stimulus for ER stress in peripheral tissues and that perhaps ER stress is a core mechanism involved in triggering insulin resistance and type 2 diabetes. Induction of ER stress in obesity. To examine whether ER stress is increased in obesity, we investigated the expression patterns of several molecular indicators of ER stress in dietary [high-fat diet (HFD)– induced] and genetic (ob/ob) models of murine obesity. The pancreatic ER kinase or PKR-like kinase (PERK) is an ER transmembrane protein kinase that phosphorylates the " subunit of translation initiation factor 2 (eIF2") in response to ER stress. The phosphorylation status of PERK and eIF2" is therefore a key indicator of the presence of ER stress (11–13). We determined the phosphorylation status of PERK (Thr980) and eIF2" (Ser51) using phospho specific antibodies. These experiments demonstrated increased PERK and eIF2" phosphorylation in liver extracts of obese mice compared with lean controls (Fig. 1, A and B). The activity of c-Jun N-terminal kinase (JNK) is also increased by ER stress (14). Consistent with earlier observations (3), total JNK activity, indicated by c-Jun phosphorylation, was also dramatically elevated in the obese mice (Fig. 1, A and B). The 78-kDA glucose-regulated/binding immunoglobulin protein (GRP78) is an ER chaperone whose expression is increased upon ER stress (7). The GRP78 mRNA levels were elevated in the liver tissue of obese mice compared with matched lean controls (Fig. 1, C and D). Because GRP78 expression is responsive to glucose (15), we tested whether this up-regulation might simply be due to increasing glucose levels. Treatment of cultured rat Fao liver cells with high levels of glucose resulted in reduced GRP78 expression (fig. S1A). Similarly, GRP78 levels were not increased in a mouse model of hyperglycemia (fig. S1B), which indicates that regulation in obesity is unlikely to be related to glycemia alone. We also tested adipose and muscle tissues, important sites for metabolic homeostasis, for indications of ER stress in obesity. As in liver, PERK phosphorylation, JNK activity, and GRP78 expression were all significantly increased in adipose tissue of obese animals compared with lean controls (fig. S2, A to C). However, no indication for ER stress was evident in the muscle tissue of obese animals (16). Taken together, these results indicate that obesity is associated with induction of ER stress predominantly in liver and adipose tissues. ER stress inhibits insulin action in liver cells. To investigate whether ER stress interferes with insulin action, we pretreated Fao liver cells with tunicamycin or thapsigargin, agents commonly used to induce ER stress. Tunicamycin significantly decreased insulin-stimulated tyrosine phosphorylation of insulin receptor substrate 1 (IRS-1) (Fig. 2, A and B), and it also produced an increase in the molecular weight of IRS-1 (Fig. 2A). IRS1 is a substrate for insulin receptor tyrosine kinase, and serine phosphorylation of IRS-1, particularly mediated by JNK, reduces insulin receptor signaling (3). Pretreatment of Fao cells with tunicamycin produced a significant increase in serine phosphorylation of IRS-1 (Fig. 2, A and B). Tunicamycin pretreatment also suppressed insulin-induced Akt phosphorylation, a more distal event in the insulin receptor signaling pathway (Fig. 2, A and B). Similar results were also obtained after treatment with thapsigargin (fig. S3A), which was independent of alterations in cellular calcium levels (fig. S3B). Hence, experimental ER stress inhibits insulin action. We next examined the role of JNK in ER stress–induced IRS-1 serine phosphorylation and inhibition of insulin-stimulated IRS-1 tyrosine phosphorylation. Inhibition of JNK activity with the synthetic inhibitor, SP600125 (17), reversed the ER stress– induced serine phosphorylation of IRS-1 (Fig. 2, C and D). Pretreatment of Fao cells with a highly specific inhibitory peptide derived from the JNK-binding protein, JIP (18), also completely preserved insulin receptor signaling in cells exposed to tunicamycin (Fig. 2, E and F). Similar results were obtained with the synthetic JNK inhibitor, SP600125 (16). These results indicate that ER stress promotes a JNK-dependent serine phosphorylation of IRS-1, which in turn inhibits insulin receptor signaling. Inositol-requiring kinase–1! (IRE-1!) plays a crucial role in insulin receptor signaling. In the presence of ER stress, increased phosphorylation of IRE-1" leads to recruitment of tumor necrosis factor receptors–associated factor 2 (TRAF2) protein and activation of JNK (14). To address whether ER stress–induced insulin resistance is dependent on intact IRE-1", we measured JNK activation, IRS-1 serine phosphorylation, and insulin receptor signaling after exposure of IRE-1"j/j and wild-type fibroblasts to tunicamycin. In the wild-type, but not IRE-1"j/j cells, induction of ER stress by tunicamycin resulted in strong activation of JNK (Fig. 2G). Tunicamycin also stimulated phosphorylation of IRS-1 at the Ser307 residue in wild-type, but not IRE-1"j/j, fibroblasts (Fig. 2G). It is noteworthy that tunicamycin inhibited insulin-stimulated tyrosine phosphorylation of IRS-1 in the wild-type cells, whereas no such effect was detected in the IRE-1"j/j cells (Fig. 2H). The level of insulin-induced tyrosine phosphorylation of IRS-1 was dramatically higher in IRE-1"j/j cells, despite lower total IRS-1 protein levels (Fig. 2H). These results demonstrate that ER stress–induced inhibition of insulin action is mediated by an IRE-1"– and JNK–dependent protein kinase cascade. Manipulation of X-box–binding protein– 1 (XBP-1) levels alters insulin receptor signaling. The transcription factor XBP-1 is a bZIP protein. The spliced or processed form of XBP-1 (XBP-1s) is a key factor in ER stress through transcriptional regulation of an array of genes, including molecular chaperones (19–22). We therefore reasoned that modulation of XBP-1s levels in cells should alter insulin action via its potential impact on the magnitude of the ER stress responses. To test this possibility, we established XBP-1 gain- and loss-of-function cellular models. First, we established an inducible gene expression system where exogenous XBP-1s is expressed only in the absence of tetracycline/doxycycline (Fig. 3A). In parallel, we also studied mouse embryo fibroblasts (MEFs) derived from XBP-1j/j mice (Fig. 3B). n fibroblasts without exogenous XBP-1s expression, tunicamycin treatment (2 6g/ml) resulted in PERK phosphorylation starting at 30 min and peaking at 3 to 4 hours, associated with a mobility shift characteristic of PERK phosphorylation (Fig. 3C). In these cells, there was also a rapid and robust activation of JNK in response to ER stress (Fig. 3C).