Insulin resistance plays a major role in the pathogenesis of the metabolic syndrome and type 2 diabetes, and yet the mechanisms responsible for it remain poorly understood. Magnetic resonance spectroscopy studies in humans suggest that a defect in insulin-stimulated glucose transport in skeletal muscle is the primary metabolic abnormality in insulin-resistant patients with type 2 diabetes. Fatty acids appear to cause this defect in glucose transport by inhibiting insulin-stimulated tyrosine phosphorylation of insulin receptor substrate-1 (IRS-1) and IRS-1-associated phosphatidylinositol 3-kinase activity. A number of different metabolic abnormalities may increase intramyocellular and intrahepatic fatty acid metabolites; these include increased fat delivery to muscle and liver as a consequence of either excess energy intake or defects in adipocyte fat metabolism, and acquired or inherited defects in mitochondrial fatty acid oxidation. Understanding the molecular and biochemical defects responsible for insulin resistance is beginning to unveil novel therapeutic targets for the treatment of the metabolic syndrome and type 2 diabetes.