Small compounds that activate the insulin-dependent signaling pathway have potential therapeutic applications in controlling type 2 diabetes mellitus. The rat enhancer of split- and hairy-related protein-2 (SHARP-2) is an insulin-inducible transcription factor that decreases expression of the phosphoenolpyruvate carboxykinase gene, a gluconeogenic enzyme gene. In this study, we screened for soybean isoflavones that can induce the rat SHARP-2 gene expression and analyzed their mechanism(s). Genistein and (S)-Equol, a metabolite of daidzein, induced rat SHARP-2 gene expression in H4IIE rat hepatoma cells. The (S)-Equol induction was mediated by both the phosphoinositide 3-kinase- and protein kinase C (PKC)-pathways. When a dominant negative form of atypical PKC lambda (aPKCλ) was expressed, the induction of SHARP-2 mRNA level by (S)-Equol was inhibited. In addition, Western blot analyses showed that (S)-Equol rapidly activated both aPKCλ and classical PKC alpha. Furthermore, the (S)-Equol induction was inhibited by treatment with a RNA polymerase inhibitor or a protein synthesis inhibitor. Finally, a reporter gene assay revealed that the transcriptional stimulation by (S)-Equol was mediated by nucleotide sequences located between −4687 and −4133 of the rat SHARP-2 gene. Thus, we conclude that (S)-Equol is an useful dietary supplement to control type 2 diabetes mellitus.