Insulin modulates gluconeogenesis by inhibition of the coactivator TORC2. During feeding, increases in circulating pancreatic insulin inhibit hepatic glucose output through the activation of the Ser/Thr kinase AKT and subsequent phosphorylation of the forkhead transcription factor FOXO1 (refs 1-3). Under fasting conditions, FOXO1 increases gluconeogenic gene expression in concert with the cAMP responsive coactivator TORC2 (refs 4-8). In response to pancreatic glucagon, TORC2 is de-phosphorylated at Ser 171 and transported to the nucleus, in which it stimulates the gluconeogenic programme by binding to CREB. Here we show in mice that insulin inhibits gluconeogenic gene expression during re-feeding by promoting the phosphorylation and ubiquitin-dependent degradation of TORC2. Insulin disrupts TORC2 activity by induction of the Ser/Thr kinase SIK2, which we show here undergoes AKT2-mediated phosphorylation at Ser 358. Activated SIK2 in turn stimulated the Ser 171 phosphorylation and cytoplasmic translocation of TORC2. Phosphorylated TORC2 was degraded by the 26S proteasome during re-feeding through an association with COP1, a substrate receptor for an E3 ligase complex that promoted TORC2 ubiquitination at Lys 628. Because TORC2 protein levels and activity were increased in diabetes owing to a block in TORC2 phosphorylation, our results point to an important role for this pathway in the maintenance of glucose homeostasis.