AIMS/HYPOTHESIS: Insulin and exercise stimulate skeletal muscle glycogen synthase (GS) activity by dephosphorylation and changes in kinetic properties. The aim of this study was to investigate the effects of insulin, exercise and post-exercise insulin stimulation on GS phosphorylation, activity and substrate affinity in obesity and type 2 diabetes. METHODS: Obese men with type 2 diabetes (n = 13) and weight-matched controls (n = 14) underwent euglycaemic-hyperinsulinaemic clamps in the rested state and 3 h after 60 min of cycling (70% maximal pulmonary oxygen uptake [[Formula: see text]]). Biopsies from vastus lateralis muscle were obtained before and after clamps, and before and immediately after exercise. RESULTS: Insulin-stimulated glucose uptake was lower in diabetic patients vs obese controls with or without prior exercise. Post exercise, glucose partitioning shifted away from oxidation and towards storage in both groups. Insulin and, more potently, exercise increased GS activity (fractional velocity [FV]) and substrate affinity in both groups. Both stimuli caused dephosphorylation of GS at sites 3a + 3b, with exercise additionally decreasing phosphorylation at sites 2 + 2a. In both groups, changes in GS activity, substrate affinity and dephosphorylation at sites 3a + 3b by exercise were sustained 3 h post exercise and further enhanced by insulin. Post exercise, reduced GS activity and substrate affinity as well as increased phosphorylation at sites 2 + 2a were found in diabetic patients vs obese controls. CONCLUSIONS/INTERPRETATION: Exercise-induced activation of muscle GS in obesity and type 2 diabetes involves dephosphorylation of GS at sites 3a + 3b and 2 + 2a and enhanced substrate affinity, which is likely to facilitate glucose partitioning towards storage. Lower GS activity and increased phosphorylation at sites 2 + 2a in type 2 diabetes in the recovery period imply an impaired response to exercise.