The C. elegans insulin/IGF-1 signaling (IIS) cascade plays a central role in regulating life span, dauer, metabolism, and stress. The major regulatory control of IIS is through phosphorylation of its components by serine/threonine-specific protein kinases. An RNAi screen for serine/threonine protein phosphatases that counterbalance the effect of the kinases in the IIS pathway identified pptr-1, a B56 regulatory subunit of the PP2A holoenzyme. Modulation of pptr-1 affects IIS pathway-associated phenotypes including life span, dauer, stress resistance, and fat storage. We show that PPTR-1 functions by regulating worm AKT-1 phosphorylation at Thr 350. With striking conservation, mammalian B56beta regulates Akt phosphorylation at Thr 308 in 3T3-L1 adipocytes. In C. elegans, this ultimately leads to changes in subcellular localization and transcriptional activity of the forkhead transcription factor DAF-16. This study reveals a conserved role for the B56 regulatory subunit in regulating insulin signaling through AKT dephosphorylation, thereby having widespread implications in cancer and diabetes research.