Insulin resistance in skeletal muscle is a major hallmark of type 2 diabetes and an early detectable abnormality in the development of this disease. The cellular mechanisms of insulin resistance include impaired insulin-mediated muscle glycogen synthesis and increased intramyocellular lipid content, whereas impaired insulin activation of muscle glycogen synthase represents a consistent, molecular defect found in both type 2 diabetic and high-risk individuals. Despite several studies of the insulin signaling pathway believed to mediate dephosphorylation and hence activation of glycogen synthase, the molecular mechanisms responsible for this defect remain unknown. Recently, the use of phospho-specific antibodies in human diabetic muscle has revealed hyperphosphorylation of glycogen synthase at sites not regulated by the classical insulin signaling pathway. In addition, novel approaches such as gene expression analysis and proteomics have pointed to abnormalities in mitochondrial oxidative phosphorylation and cellular stress in muscle of type 2 diabetic subjects, and recent work suggests that impaired mitochondrial activity is another early defect in the pathogenesis of type 2 diabetes. This review will discuss the latest advances in the understanding of the molecular mechanisms underlying insulin resistance in human skeletal muscle in type 2 diabetes with focus on possible links between impaired glycogen synthase activity and mitochondrial dysfunction.