We have previously described a polymorphism in the 3' untranslated region (UTR) of the PPP1R3 gene that encodes the muscle-specific glycogen-targeting regulatory PP1 subunit. This polymorphism alters the distance between two putative mRNA-destabilizing ATTTA (AUUUA) motifs and is distinguished by a 10-nucleotide (allele ARE1) vs a 2-nucleotide interval (allele ARE2). ARE2 is associated with insulin resistance as well as increased prevalence of type 2 diabetes in the Pima Indians, and correlates with reduced expression of this subunit in vivo, causing a 10-fold half-life reduction of reporter mRNA in NIH3T3 cells. Gel shift assays, Northwestern blotting, and RNA-protein UV crosslinking revealed three proteins (43, 80, and 139 kDa) binding to the polymorphic ARE region in these cells. The interactions are sequence specific, and can be suppressed by an unlabeled competitor in a dose-dependent manner. The less stable ARE2 allele shows at least 2-fold higher relative protein binding, indicating that the polymorphic ARE region has a mRNA-destabilizing role. We suggest that the increased protein binding to ARE2 contributes to a faster degradation of PPP1R3 mRNA carrying this allele, and the resulting lower concentration of the protein contributes to insulin resistance, thus increasing the risk for development of type 2 diabetes.