Elevated non-esterified fatty acids, triglyceride, diacylglycerol, and ceramide have all been associated with insulin resistance in muscle. We set out to investigate the role of intramyocellular lipid metabolites in the induction of insulin resistance in human primary myoblast cultures. Muscle cells were subjected to adenovirus-mediated expression of perilipin or incubated with fatty acids for 18 h, prior to insulin stimulation and measurement of lipid metabolites and rates of glycogen synthesis. Adenovirus-driven perilipin expression lead to significant accumulation of triacylglycerol in myoblasts, without any detectable effect on insulin sensitivity, as judged by the ability of insulin to stimulate glycogen synthesis. Similarly, incubation of cells with the monounsaturated fatty acid oleate resulted in triacylglycerol accumulation without inhibiting insulin action. By contrast, the saturated fatty acid palmitate induced insulin resistance. Palmitate treatment caused less accumulation of triacylglycerol than did oleate but also induced significant accumulation of both diacylglycerol and ceramide. Insulin resistance was also caused by cell-permeable analogues of ceramide, and palmitate-induced resistance was blocked in the presence of inhibitors of de novo ceramide synthesis. Oleate co-incubation completely prevented the insulin resistance induced by palmitate. Our data are consistent with ceramide being the agent responsible for insulin resistance caused by palmitate exposure. Furthermore, the triacylglycerol derived from oleate was able to exert a protective role in sequestering palmitate, thus preventing its conversion to ceramide.