Type 2 diabetes is caused by a combination of impaired insulin secretion and, to a greater extent, resistance of target tissues to insulin action. Phosphoinositide 3-kinase (PI3K) plays a key role in insulin signaling and has been shown to be blunted in tissues of type 2 diabetes subjects. There is emerging biochemical and, particularly, genetic evidence suggesting that insulin resistance can potentially be treated via modulation of PI3K by targeting PI3K itself or its up and down-stream modulators. These potential targets include Src homology 2 domain containing inositol 5-phosphatase 2 (SHIP2), phosphatase and tensin homolog deleted on chromosome ten (PTEN), kappaB kinase beta (IKKbeta), PKC isoforms, and the PI3K p85 subunit. There is evidence suggesting that their inhibition affects PI3K activity and improves insulin sensitivity in vivo. In the current review, we will discuss the role of these molecules in insulin-mediated activation of PI3K, the rational for targeting these molecules for diabetes treatment, and some critical issues in terms of drug development.