We have previously characterized an insulin receptor substrate 1 (IRS-1)-overexpressing beta-cell line. These beta-cells demonstrated elevated fractional insulin secretion and elevated cytosolic Ca(2+) levels compared with wild-type and vector controls. This effect of IRS-1 may be mediated via an interaction with the sarco-endoplasmic reticulum calcium ATPase (SERCA). Here we demonstrate that IRS-1 and IRS-2 localize to an endoplasmic reticulum (ER)-enriched fraction in beta-cells using subcellular fractionation. We also observe co-localization of both IRS-1 and IRS-2 with ER marker proteins using immunofluorescent confocal microscopy. Furthermore, immuno-electron microscopy studies confirm that IRS-1 and SERCA3b localize to vesicles derived from the ER. In Chinese hamster ovary-T (CHO-T) cells transiently transfected with SERCA3b alone or together with IRS-1, SERCA3b co-immunoprecipitates with IRS-1. This interaction is enhanced with insulin treatment. SERCA3b also co-immunoprecipitates with IRS-1 in wild-type and IRS-1-overexpressing beta-cell lines. Ca(2+) uptake in ER-enriched fractions prepared from wild-type and IRS-1-overexpressing cell lines shows no significant difference, indicating that the previously observed decrease in Ca(2+) uptake by IRS-1-overexpressing cells is not the result of a defect in SERCA. Treatment of wild-type beta-cells with thapsigargin, an inhibitor of SERCA, resulted in an increase in glucose-stimulated fractional insulin secretion similar to that observed in IRS-1-overexpressing cells. The colocalization of IRS proteins and SERCA in the ER of beta-cells increases the likelihood that these proteins can interact with one another. Co-immunoprecipitation of IRS-1 and SERCA in CHO-T cells and beta-cells confirms that these proteins do indeed interact directly. Pharmacological inhibition of SERCA in beta-cells results in enhanced secretion of insulin. Taken together, our data suggest that interaction between IRS proteins and SERCA is an important regulatory step in insulin secretion.