Activation of protein kinase C epsilon (PKCε) in the liver has been widely associated with hepatic insulin resistance. PKCε is proposed to inhibit insulin signalling through phosphorylation of the insulin receptor. We tested this directly using “floxed” PKCε mice bred with mice expressing Cre recombinase under the control of the cytomegalovirus, albumin, lysozyme M or adiponectin promoters to generate global, liver-, macrophage- and adipose tissue-specific PKCε knockout (KO) mice. Global deletion of PKCε recapitulated the benefits for diet-induced glucose intolerance that we previously described using conventional PKCε KO mice. However, we did not detect PKCε-dependent alterations in hepatic insulin receptor phosphorylation. Neither macrophage- nor liver-specific KO mice were protected against diet-induced glucose intolerance or insulin resistance determined by euglycemic clamp. In contrast, adipose tissue-specific KO mice did exhibit improved glucose tolerance, but phosphoproteomics revealed no PKCε-dependent effect on the activation of canonical insulin signaling pathways. Instead, we observed altered phosphorylation of proteins associated with cell junctions and endosomes, suggesting a role in endocrine function. This was linked to changes in hepatic expression of several genes linked to glucose homeostasis and lipid metabolism. The primary effect of PKCε on glucose homeostasis is, therefore, not exerted directly in the liver as currently posited. However, PKCε activity in adipose tissue modulates glucose tolerance and is involved in crosstalk with the liver.