The effects of vanadate and the stable peroxovanadate compound bpV(pic) on insulin binding and degradation were investigated in rat adipocytes under conditions of ongoing receptor cycling. Both bpV(pic) and vanadate increased 125I-insulin binding to intact cells through an increase in apparent receptor affinity. The maximal effect of bpV(pic) was to increase binding ∼4-fold (EC 50 0.06 ± 0.01 mM), whereas vanadate increased binding ∼2-fold (EC 50 1.4 ± 0.2 mM). Removal of cell surface insulin-receptor complexes with trypsin showed that the effects on binding exerted by bpV(pic) and vanadate were due to a similar increase in both cell surface binding and intracellular accumulation of radioactivity. Both bpV(pic) and vanadate inhibited the degradation of 125I-insulin in medium containing 1% bovine serum albumin. The ratio of degraded/intact intracellular 125I-insulin was also markedly reduced by these agents, suggesting that they inhibit intracellular insulin-degrading proteases. Similar to previous findings with vanadate, bpV(pic) stimulated glucose transport and, at low concentrations, enhanced insulin sensitivity. Taken together, these data demonstrate that both bpV(pic) and vanadate inhibit insulin degradation. In addition, they significantly enhance cell surface insulin binding in rat fat cells and this is associated with an improved insulin sensitivity.