A common observation in animal models and in humans is that accumulation of muscle triglyceride is associated with the development of insulin resistance. In animals, this is true of genetic models of obesity and nutritional models of insulin resistance generated by high-fat feeding, infusion of lipid, or infusion of glucose. Although there is a strong link between the accumulation of triglycerides (TG) in muscle and insulin resistance, it is unlikely that TG are directly involved in the generation of muscle insulin resistance. There are now other plausible mechanistic links between muscle lipid metabolites and insulin resistance, in addition to the classic substrate competition proposed by Randle's glucose-fatty acid cycle. The first step in fatty acid metabolism (oxidation or storage) is activation to the long-chain fatty acyl CoA (LCACoA). This review covers the evidence suggesting that cytosolic accumulation of this active form of lipid in muscle can lead to impaired insulin signaling, impaired enzyme activity, and insulin resistance, either directly or by conversion to other lipid intermediates that alter the activity of key kinases and phosphatases. Actions of fatty acids to bind specific nuclear transcription factors provide another mechanism whereby different lipids could influence metabolism.