Initiating mechanisms that impair gluconeogenic enzymes and spare lipogenic enzymes in diet-induced obesity (DIO) are obscure. Here, we examined insulin signaling to Akt and atypical protein kinase C (aPKC) in liver and muscle and hepatic enzyme expression in mice consuming a moderate high-fat (HF) diet. In HF diet–fed mice, resting/basal and insulin-stimulated Akt and aPKC activities were diminished in muscle, but in liver, these activities were elevated basally and were increased by insulin to normal levels. Despite elevated hepatic Akt activity, FoxO1 phosphorylation, which diminishes gluconeogenesis, was impaired; in contrast, Akt-dependent phosphorylation of glycogenic GSK3β and lipogenic mTOR was elevated. Diminished Akt-dependent FoxO1 phosphorylation was associated with reduced Akt activity associated with scaffold protein WD40/Propeller/FYVE (WD40/ProF), which reportedly facilitates FoxO1 phosphorylation. In contrast, aPKC activity associated with WD40/ProF was increased. Moreover, inhibition of hepatic aPKC reduced its association with WD40/ProF, restored WD40/ProF-associated Akt activity, restored FoxO1 phosphorylation, and corrected excessive expression of hepatic gluconeogenic and lipogenic enzymes. Additionally, Akt and aPKC activities in muscle improved, as did glucose intolerance, weight gain, hepatosteatosis, and hyperlipidemia. We conclude that Akt-dependent FoxO1 phosphorylation occurs on the WD/Propeller/FYVE scaffold in liver and is selectively inhibited in early DIO by diet-induced increases in activity of cocompartmentalized aPKC.