This review postulates and presents recent evidence that insulin resistance is initiated in the adipose tissue and also suggests that the adipose tissue may play a pivotal role in the induction of insulin resistance in the muscles and the liver. Marked impairments in insulin's intracellular signaling cascade are present in fat cells from type 2 diabetic patients, including reduced IRS-1 gene and protein expression, impaired insulin-stimulated PI3-kinase and PKB/Akt activities. In contrast, upstream insulin signaling in skeletal muscle from diabetic subjects only shows modest impairments and PKB/Akt activation in vivo by insulin appears normal. However, insulin-stimulated glucose transport and glycogen synthesis are markedly reduced. Similar marked impairments in insulin signaling, including reduced IRS-1 expression, impaired insulin-stimulated PI3-kinase and PKB/Akt activities are also seen in some (approximately 30%) normoglycemic individuals with genetic predisposition for type 2 diabetes. In addition, GLUT4 expression is markedly reduced in these cells, similar to what is seen in diabetic cells. The individuals with reduced cellular expression of IRS-1 and GLUT4 are also markedly insulin resistant and exhibit several characteristics of the Insulin Resistance Syndrome.Thus, a 'diabetic' pattern is seen in the fat cells also in normoglycemic subjects and this is associated with a marked insulin resistance in vivo. It is proposed that insulin resistance and/or its effectors is initiated in fat cells and that this may secondarily encompass other target tissues for insulin, including the impaired glucose transport in the muscles.