Insulin elicits diverse biological responses in many tissues and cell types by binding to its specific receptor. The insulin receptor (IR) is a tetramer consisting of two extracellular alpha subunits and two membrane-spanning beta subunits. The binding of insulin to the receptor causes conformational changes that lead to autophosphorylation and activation of the tyrosine kinase intrinsic to the beta subunits. Insulin receptor transphosphorylates several immediate substrates, resulting in modulation of a cascade of downstream signal transduction molecules. In order to discover small molecules that activate the human insulin receptor tyrosine kinase (IRTK), a cell-based assay was established and utilized to screen a collection of synthetic chemicals and natural product extracts. This effort led to the identification of a nonpeptidyl, small molecule, insulin-mimetic compound (demethylasterriquinone B-1, DMAQ-B1) that was isolated from a mixture of metabolites produced by a tropical endophytic fungus, Pseudomassaria sp. This compound induced human IRTK activation and increased tyrosine phosphorylation of IR beta subunit. It mediated insulin-like effects, including insulin receptor substrate-1 (IRS-1) phosphorylation and activation of phosphotidylinositide 3-kinase and Akt kinase. DMAQ-B1 also exhibited an insulin-like effect on glucose uptake in adipocytes and skeletal muscle tissue. Furthermore, the compound was relatively selective for IR vs. insulin-like growth factor-I (IGF-I) receptor and other homologous receptor tyrosine kinases. In addition, it activated partially purified native IR or recombinant IR kinase, demonstrating the direct interaction of the small molecule with the IR. Oral administration of DMAQ-B1 resulted in significant glucose lowering in two mouse models of diabetes. Thus, DMAQ-B1 represents the first orally active insulin-mimetic agent. Pharmaceutical intervention aimed at augmenting IR function ultimately may prove beneficial as a novel therapeutic option in patients with diabetes.