The insulin-degrading enzyme (IDE) is a metalloendopeptidase with a high affinity for insulin. Human genetic polymorphisms in Ide have been linked to increased risk for T2DM. In mice, hepatic Ide ablation causes glucose intolerance and insulin resistance when mice are fed a regular diet. These studies were undertaken to further investigate its regulatory role in glucose homeostasis and insulin sensitivity in diet-induced obesity. To this end, we have compared the metabolic effects of loss versus gain of IDE function in mice fed a high-fat diet (HFD). We demonstrate that loss of IDE function in liver (L-IDE-KO mouse) exacerbates hyperinsulinemia and insulin resistance without changes in insulin clearance but in parallel to an increase in pancreatic β-cell function. Insulin resistance was associated with increased FoxO1 activation and a ~2-fold increase of GLUT2 protein levels in the liver of HFD-fed mice in response to an intraperitoneal injection of insulin. Conversely, gain of IDE function (adenoviral delivery) improves glucose tolerance and insulin sensitivity, in parallel to a reciprocal ~2-fold reduction in hepatic GLUT2 protein levels. Furthermore, in response to insulin, IDE co-immunoprecipitates with the insulin receptor in liver lysates of mice with adenoviral-mediated liver overexpression of IDE. We conclude that IDE regulates hepatic insulin action and whole-body glucose metabolism in diet-induced obesity via insulin receptor levels. •Loss of hepatic IDE function exacerbates insulin resistance in mice fed a HFD.•Gain of hepatic IDE function improves insulin sensitivity in mice fed HFD.•Hepatic IDE appears to modulate insulin homeostasis via regulating β-cell function.