The insulin receptor kinase (IRK) is a tyrosine kinase whose activation, subsequent to insulin binding, is essential for insulin-signalling in target tissues. Insulin binding to its cell surface receptor is rapidly followed by internalization of insulin-IRK complexes into the endosomal apparatus (EN) of the cell. Internalization of insulin into target organs, especially liver, is implicated in effecting insulin clearance from the circulation. Internalization mediates IRK downregulation and hence attenuation of insulin sensitivity although most internalized IRKs readily recycle to the plasma membrane at physiological levels of insulin. A role for internalization in insulin signalling is indicated by the accumulation of activated IRKs in ENs. Furthermore, the maximal level of IRK activation has been shown to exceed that attained at the cell surface. Using an in vivo rat liver model in which endosomal IRKs are exclusively activated has revealed that IRKs at this intracellular locus are able by themselves to promote IRS-1 tyrosine phosphorylation and induce hypoglycemia. Furthermore, studies with isolated rat adipocytes reveal the EN to be the principle site of insulin-stimulated IRS-1 tyrosine phosphorylation and associated PI3K activation. Key steps in the termination of the insulin signal are also operative in ENs. Thus, an endosomal acidic insulinase has been identified which limits the extent of IRK activation. Furthermore, IRK dephosphorylation is effected in ENs by an intimately associated phosphotyrosine phosphatase(s) which, in rat liver, appears to regulate IRK activity in both a positive and negative fashion. Thus, insulin-mediated internalization of IRKs into ENs plays a crucial role in effecting and regulating signal transduction in addition to modulating the levels of circulating insulin and the cellular concentration of IRK in target tissues.