Gene targeting was used to characterize the physiological role of growth factor receptor‐bound (Grb)14, an adapter‐type signalling protein that associates with the insulin receptor (IR). Adult male Grb14^−/− mice displayed improved glucose tolerance, lower circulating insulin levels, and increased incorporation of glucose into glycogen in the liver and skeletal muscle. In ex vivo studies, insulin‐induced 2‐deoxyglucose uptake was enhanced in soleus muscle, but not in epididymal adipose tissue. These metabolic effects correlated with tissue‐specific alterations in insulin signalling. In the liver, despite lower IR autophosphorylation, enhanced insulin‐induced tyrosine phosphorylation of insulin receptor substrate (IRS)‐1 and activation of protein kinase B (PKB) was observed. In skeletal muscle, IR tyrosine phosphorylation was normal, but signalling via IRS‐1 and PKB was increased. Finally, no effect of Grb14 ablation was observed on insulin signalling in white adipose tissue. These findings demonstrate that Grb14 functions in vivo as a tissue‐specific modulator of insulin action, most likely via repression of IR‐mediated IRS‐1 tyrosine phosphorylation, and highlight this protein as a potential target for therapeutic intervention.