Net effects of insulin on glucose entry, metabolism and other cellular processes have been well documented over the past 30-40 years. Although it is known that insulin binds to a specific cell membrane receptor protein which undergoes autophosphorylation and tyrosine kinase activation, the individual reactions following receptor activation that cause the metabolic changes remain unknown. It is well documented that the isolated insulin receptor has a high degree of basal autophosphorylation capacity and externally directed tyrosine kinase. There is also evidence that some in vivo autophosphorylation can take place in the total absence of insulin. If receptor activity does exist in the absence of insulin, then receptor function needs to be reanalyzed. It will be proposed here that the insulin binding membrane protein functions mainly to inhibit glucose transport under low physiological levels of insulin. Evidence of basal receptor enzymatic activity in the absence of insulin supports this theory. Under metabolically sufficient conditions, enough insulin receptors are functionally active to interact with the glucose transport system in an inhibitory manner, providing membrane control of internal glucose metabolism. Insulin acts by aggregating this inhibitory system. If inhibitory insulin receptors are aggregated following insulin elevation, their inhibitory action is prevented and glucose transport increases. This increase in transport will be in direct proportion to the temporal inhibitory level of the receptor and to the area of the cell membrane cleared of their inhibitory effect. When insulin receptor protein is confined to small areas of the cell membrane through aggregation, any potential inhibitory function is negated and glucose entry increases dramatically. This is the classical insulin effect. Both of these concepts were suggested 37 years earlier. Randle & Smith (1957, Biochem. Biophys. Acta 25, 442; 1958, Biochem. J. 70, 490) proposed that the internal supply of energy rich compounds limited glucose entry and that the effect of insulin was to inhibit this process which was inhibiting glucose entry. The present report provides a mechanism for this.