Insulin is a key hormone regulating the control of metabolism and the maintenance of normoglycaemia and normolipidaemia. Insulin acts by binding to its cell surface receptor, thus activating the receptor's intrinsic tyrosine kinase activity, resulting in receptor autophosphorylation and phosphorylation of several substrates. Tyrosine phosphorylated residues on the receptor itself and on subsequently bound receptor substrates provide docking sites for downstream signalling molecules, including adapters, protein serine/threonine kinases, phosphoinositide kinases and exchange factors. Collectively, those molecules orchestrate the numerous insulin-mediated physiological responses. A clear picture is emerging of the way in which insulin elicits several intracellular signalling pathways to mediate its physiologic functions. A further challenge, being pursued by several laboratories, is to understand the molecular mechanisms that underlie insulin action at the peripheral level, deregulation of which ultimately leads to hyperglycaemia and Type 2 diabetes. We review how circulating factors such as insulin itself, TNF-alpha, interleukins, fatty acids and glycation products influence insulin action through insulin signalling molecules themselves or through other pathways ultimately impinging on the insulin-signalling pathway. Understanding how the mechanism by which molecular insulin action is modulated by these factors will potentially provide new targets for pharmacological agents, to enable the control of altered glucose and lipid metabolism and diabetes.