Although many effects of leptin are mediated through the central nervous system, leptin can regulate metabolism through a direct action on peripheral tissues, such as fat and liver. We show here that leptin, at physiological concentrations, acts through an intracellular signaling pathway similar to that activated by insulin in isolated primary rat hepatocytes. This pathway involves stimulation of phosphatidylinositol 3-kinase (PI3K) binding to insulin receptor substrate-1 and insulin receptor substrate-2, activation of PI3K and protein kinase B (AKT), and PI3K-dependent activation of cyclic nucleotide phosphodiesterase 3B, a cAMP-degrading enzyme. One important function of this signaling pathway is to reduce levels of cAMP, because leptin-mediated activation of both protein kinase B and phosphodiesterase 3B is most marked following elevation of cAMP by glucagon, and because leptin suppresses glucagon-induced cAMP elevation in a PI3K-dependent manner. There is little or no expression of the long form leptin receptor in primary rat hepatocytes, and these signaling events are probably mediated through the short forms of the leptin receptor. Thus, leptin, like insulin, induces an intracellular signaling pathway in hepatocytes that culminates in cAMP degradation and an antagonism of the actions of glucagon.