Muscle fatty acid (FA) metabolism is impaired in obesity and insulin resistance, reflected by reduced rates of FA oxidation and accumulation of lipids. It has been suggested that interventions that increase FA oxidation may enhance insulin action by reducing these lipid pools. Here, we examined the effect of endurance training on rates of mitochondrial FA oxidation, the activity of carnitine palmitoyltransferase I (CPT I), and the lipid content in muscle of obese individuals and related these to measures of glucose tolerance. Nine obese subjects completed 8 wk of moderate-intensity endurance training, and muscle biopsies were obtained before and after training. Training significantly improved glucose tolerance, with a reduction in the area under the curve for glucose (P < 0.05) and insulin (P = 0.01) during an oral glucose tolerance test. CPT I activity increased 250% (P = 0.001) with training and became less sensitive to inhibition by malonyl-CoA. This was associated with an increase in mitochondrial FA oxidation (+120%, P < 0.001). Training had no effect on muscle triacylglycerol content; however, there was a trend for training to reduce both the total diacylglcyerol (DAG) content (-15%, P = 0.06) and the saturated DAG-FA species (-27%, P = 0.06). Training reduced both total ceramide content (-42%, P = 0.01) and the saturated ceramide species (-32%, P < 0.05). These findings suggest that the improved capacity for mitochondrial FA uptake and oxidation leads not only to a reduction in muscle lipid content but also a to change in the saturation status of lipids, which may, at least in part, provide a mechanism for the enhanced insulin action observed with endurance training in obese individuals.