Mice with liver-specific overexpression of dominant negative phosphorylation-defective S503A-CEACAM1 mutant (L-SACC1) developed chronic hyperinsulinemia resulting from blunted hepatic clearance of insulin, visceral obesity, and glucose intolerance. To determine the underlying mechanism of altered glucose homeostasis, a 2-h hyperinsulinemic euglycemic clamp was performed, and tissue-specific glucose and lipid metabolism was assessed in awake L-SACC1 and wild-type mice. Inactivation of carcinoembryonic antigen-related cell adhesion molecule 1 (CEACAM1) caused insulin resistance in liver that was mostly due to increased expression of fatty acid synthase and lipid metabolism, resulting in elevated intrahepatic levels of triglyceride and long-chain acyl-CoAs. Whole body insulin resistance in the L-SACC1 mice was further attributed to defects in insulin-stimulated glucose uptake in skeletal muscle and adipose tissue. Insulin resistance in peripheral tissues was associated with significantly elevated intramuscular fat contents that may be secondary to increased whole body adiposity (assessed by (1)H-MRS) in the L-SACC1 mice. Overall, these results demonstrate that L-SACC1 is a mouse model in which chronic hyperinsulinemia acts as a cause, and not a consequence, of insulin resistance. Our findings further indicate the important role of CEACAM1 and hepatic insulin clearance in the pathogenesis of obesity and insulin resistance.