Causal transcripts at genomic loci associated with type 2 diabetes (T2D) are mostly unknown. The chr8p23.1 variant rs4841132, associated with an insulin-resistant diabetes risk phenotype, lies in the second exon of a long non-coding RNA (lncRNA) gene, LOC157273, located 175 kilobases from PPP1R3B, which encodes a key protein regulating insulin-mediated hepatic glycogen storage in humans. We hypothesized that LOC157273 regulates expression of PPP1R3B in human hepatocytes. We tested our hypothesis using Stellaris fluorescent in situ hybridization to assess subcellular localization of LOC157273; small interfering RNA (siRNA) knockdown of LOC157273, followed by RT-PCR to quantify LOC157273 and PPP1R3B expression; RNA-seq to quantify the whole-transcriptome gene expression response to LOC157273 knockdown; and an insulin-stimulated assay to measure hepatocyte glycogen deposition before and after knockdown. We found that siRNA knockdown decreased LOC157273 transcript levels by approximately 80%, increased PPP1R3B mRNA levels by 1.7-fold, and increased glycogen deposition by >50% in primary human hepatocytes. An A/G heterozygous carrier (vs. three G/G carriers) had reduced LOC157273 abundance due to reduced transcription of the A allele and increased PPP1R3B expression and glycogen deposition. We show that the lncRNA LOC157273 is a negative regulator of PPP1R3B expression and glycogen deposition in human hepatocytes and a causal transcript at an insulin-resistant T2D risk locus.