The liver plays a central role in whole-body lipid and glucose homeostasis. Increasing dietary fat intake results in increased hepatic fat deposition, which is associated with a risk for development of insulin resistance and type 2 diabetes. In this study, we demonstrate a role for the phosphate inorganic transporter 1 (PiT1/SLC20A1) in regulating metabolism. Specific knockout of Pit1 in hepatocytes significantly improved glucose tolerance and insulin sensitivity, enhanced insulin signaling, and decreased hepatic lipogenesis. We identified USP7 as a PiT1 binding partner and demonstrated that Pit1 deletion inhibited USP7/IRS1 dissociation upon insulin stimulation. This prevented IRS1 ubiquitination and its subsequent proteasomal degradation. As a consequence, delayed insulin negative feedback loop and sustained insulin signaling were observed. Moreover, PiT1-deficient mice were protected against high-fat-diet-induced obesity and diabetes. Our findings indicate that PiT1 has potential as a therapeutic target in the context of metabolic syndrome, obesity, and diabetes.