© 2016 The Author(s). Insulin resistance is a key driver of type 2 diabetes (T2D) and is characterized by defective insulin receptor (INSR) signalling. Although surface INSR downregulation is a well-established contributor to insulin resistance, the underlying molecular mechanisms remain obscure. Here we show that the E3 ubiquitin ligase MARCH1 impairs cellular insulin action by degrading cell surface INSR. Using a large-scale RNA interference screen, we identify MARCH1 as a negative regulator of INSR signalling. March1 loss-of-function enhances, and March1 overexpression impairs, hepatic insulin sensitivity in mice. MARCH1 ubiquitinates INSR to decrease cell surface INSR levels, but unlike other INSR ubiquitin ligases, MARCH1 acts in the basal state rather than after insulin stimulation. Thus, MARCH1 may help set the basal gain of insulin signalling. MARCH1 expression is increased in white adipose tissue of obese humans, suggesting that MARCH1 contributes to the pathophysiology of T2D and could be a new therapeutic target.