Diabetic bladder dysfunction (DBD) is the most common complication in diabetes. Myogenic abnormalities are common in DBD; however, the underlying mechanisms leading to these remain unclear. To understand the importance of smooth muscle insulin receptor (IR)-mediated signaling in the pathogenesis of DBD, we conditionally deleted it to achieve either heterozygous (SMIR+/−) or homozygous (SMIR−/−) deletion in smooth muscle cells. Despite impaired glucose and insulin tolerance seen with SMIR−/− mice, both SMIR+/− and SMIR−/− mice exhibited normal blood glucose and plasma insulin levels. Interestingly, these mice had abnormal voiding phenotypes, that included urinary frequency and small voids, and bladder smooth muscle (BSM) had significantly diminished contraction force. Morphology revealed a dilated bladder with thinner BSM layer, and BSM bundles were disorganized with penetrating interstitial tissue. Deletion of IR elevated FoxO and decreased mTOR protein expression, which further decreased the expression of Chrm3, P2x1, Sm22, and Cav1.2, crucial functional proteins for BSM contraction. Furthermore, we determined the expression of adiponectin in BSM, and deletion of IR in BSM inhibited adiponectin-mediated signaling. In summary, disruption of IR-mediated signaling in BSM caused abnormalities in proliferation and differentiation, leading to diminished BSM contractility and a voiding dysfunction phenotype that recapitulates human DBD.