The mechanism underlying the ability of insulin to acutely activate acetyl-CoA carboxylase [acetyl-CoA: carbon-dioxide ligase (ADP-forming), EC 6.4.1.2; AcCoA-Case] has been examined in Fao Reuber hepatoma cells. Insulin promotes the rapid activation of AcCoACase, as measured in cell lysates, and this stimulation persists to the same degree after isolation of AcCoACase by avidin-Sepharose chromatography. The insulin-stimulated enzyme, as compared with control enzyme, exhibits an increase in both citrate-independent and -dependent activity and a decrease in the Ka for citrate. Direct examination of the phosphorylation state of isolated 32P-labeled AcCoACase after insulin exposure reveals a marked decrease in total enzyme phosphorylation coincident with activation. The dephosphorylation due to insulin appears to be restricted to the phosphorylation sites previously shown to regulate AcCoACase activity. All of these effects of insulin are mimicked by a low molecular weight autocrine factor, tentatively identified as an oligosaccharide, present in conditioned medium of hepatoma cells. These data suggest that insulin may activate AcCoACase by inhibiting the activity of protein kinase(s) or stimulating the activity of protein phosphatase(s) that control the phosphorylation state of the enzyme.