Insulin resistance is a growing worldwide phenomenon, which progressively develops over years, and finally, if unchecked, predisposes to cardiovascular disease and diabetes mellitus type 2. Insulin resistance is a generalized metabolic disorder characterized by inefficient insulin function in skeletal muscle, liver and adipocytes. There is growing evidence that an increased free fatty acid level, and more importantly, the relative amounts of saturated and unsaturated fatty acids contributing to it, plays an important role in the development of insulin resistance. In turn, this is a reflection of the composition of dietary fat. Ultimately both the dietary intake and plasma levels determine the fatty acid composition of cell membranes. Higher levels of membrane saturated fatty acids seem to greatly impair the action of insulin, whereas the presence of polyunsaturated fatty acids, especially of the omega-3 and -6 families, in contrast, improves insulin sensitivity. In vitro studies, however, have not always corroborated the clinical evidence. Possible roles played by the various saturated and unsaturated fatty acids in the insulin-signaling pathway are discussed in light of recent evidence. Fatty acids have also been shown to alter gene expression in cells, in particular the peroxisome proliferator-activated receptor-gamma2 gene, adding to this multifaceted connection. As man has moved over the centuries from a hunter-gatherer diet to greater intakes of saturated and trans-fatty acids, insulin resistance has appeared with its related pathology. Greater understanding of the role played by dietary fat and plasma fatty acids in pathogenesis of insulin resistance, will allow for more timely prevention and improved treatment in the future.