Eukaryotic initiation factor eIF2B catalyses a key regulatory step in mRNA translation. eIF2B and total protein synthesis are acutely activated by insulin, and this requires phosphatidylinositol 3-kinase (PI 3-kinase). The epsilon-subunit of eIF2B is phosphorylated by glycogen synthase kinase-3 (GSK-3), which is inactivated by insulin in a PI 3-kinase-dependent manner. Here we identify the phosphorylation site in eIF2Bepsilon as Ser540 and show that treatment of eIF2B with GSK-3 inhibits its activity. Ser540 is phosphorylated in intact cells and undergoes dephosphorylation in response to insulin. This is blocked by PI 3-kinase inhibitors. Insulin-induced dephosphorylation of this inhibitory site in eIF2B seems likely to be important in the overall activation of translation by this hormone.