Protein kinase C epsilon (PKCɛ) activation in the liver is proposed to inhibit insulin action through phosphorylation of the insulin receptor. Here, however, we demonstrated that global, but not liver-specific, deletion of PKCɛ in mice protected against diet-induced glucose intolerance and insulin resistance. Furthermore, PKCɛ-dependent alterations in insulin receptor phosphorylation were not detected. Adipose-tissue-specific knockout mice did exhibit improved glucose tolerance, but phosphoproteomics revealed no PKCɛ-dependent effect on the activation of insulin signaling pathways. Altered phosphorylation of adipocyte proteins associated with cell junctions and endosomes was associated with changes in hepatic expression of several genes linked to glucose homeostasis and lipid metabolism. The primary effect of PKCɛ on glucose homeostasis is, therefore, not exerted directly in the liver as currently posited, and PKCɛ activation in this tissue should be interpreted with caution. However, PKCɛ activity in adipose tissue modulates glucose tolerance and is involved in crosstalk with the liver.