Sphingolipids are important structural components of cell membranes and act as critical regulators of cell function by modulating intracellular signaling pathways. Specific sphingolipids, such as ceramide, glucosylceramide, and ganglioside GM3, have been implicated in various aspects of insulin resistance, because they have been shown to modify several steps in the insulin signaling pathway, such as phosphorylation of either protein kinase B (Akt) or of the insulin receptor. We now explore the role of the ceramide acyl chain length in insulin signaling by using a ceramide synthase 2 (CerS2) null mouse, which is unable to synthesize very long acyl chain (C22-C24) ceramides. CerS2 null mice exhibited glucose intolerance despite normal insulin secretion from the pancreas. Both insulin receptor and Akt phosphorylation were abrogated in liver, but not in adipose tissue or in skeletal muscle. The lack of insulin receptor phosphorylation in liver correlated with its inability to translocate into detergent-resistant membranes (DRMs). Moreover, DRMs in CerS2 null mice displayed properties significantly different from those in wild-type mice, suggesting that the altered sphingolipid acyl chain length directly affects insulin receptor translocation and subsequent signaling. Conclusion: We conclude that the sphingolipid acyl chain composition of liver regulates insulin signaling by modifying insulin receptor translocation into membrane microdomains.