Insulin resistance occurs in obesity and Type II (non-insulin-dependent) diabetes mellitus, but it is also a prominent feature of lipodystrophy. Adipose tissue could play a crucial part in buffering the flux of fatty acids in the circulation in the postprandial period, analogous to the roles of the liver and skeletal muscle in buffering postprandial glucose fluxes. Adipose tissue provides its buffering action by suppressing the release of non-esterified fatty acids into the circulation and by increasing triacylglycerol clearance. In particular, the pathway of 'fatty acid trapping' (adipocyte uptake of fatty acids liberated from plasma triacylglycerol by lipoprotein lipase) could play a key part in the buffering process. If this buffering action is impaired, then extra-adipose tissues are exposed to excessive fluxes of lipid fuels and could accumulate these in the form of triacylglycerol, leading to insulin resistance. These tissues will include liver, skeletal muscle and the pancreatic beta cell, where the long term effect is to impair insulin secretion. Adipose tissue buffering of lipid fluxes is impaired in obesity through defects in the ability of adipose tissue to respond rapidly to the dynamic situation that occurs after meals. It is also impaired in lipodystrophy because there is not sufficient adipose tissue to provide the necessary buffering capacity. Thus, the phenotype, at least with regard to insulin resistance, is similar with both excess and deficiency of adipose tissue. Furthermore, this concept could provide a framework for understanding the action of the thiazolidinedione insulin-sensitizing agents.