Increased plasma levels of free fatty acids (FFA) occur in states of insulin resistance such as obesity and type 2 diabetes mellitus. These high levels of plasma FFA are proposed to play an important role for the development of insulin resistance but the mechanisms involved are still unclear. This study investigated the effects of saturated and unsaturated FFA on insulin sensitivity in parallel with mitochondrial function. C2C12 myotubes were treated for 24 h with 0.1 mM of saturated (palmitic and stearic) and unsaturated (oleic, linoleic, eicosapentaenoic, and docosahexaenoic) FFA. After this period, basal and insulin-stimulated glucose metabolism and mitochondrial function were evaluated. Saturated palmitic and stearic acids decreased insulin-induced glycogen synthesis, glucose oxidation, and lactate production. Basal glucose oxidation was also reduced. Palmitic and stearic acids impaired mitochondrial function as demonstrated by decrease of both mitochondrial hyperpolarization and ATP generation. These FFA also decreased Akt activation by insulin. As opposed to saturated FFA, unsaturated FFA did not impair glucose metabolism and mitochondrial function. Primary cultures of rat skeletal muscle cells exhibited similar responses to saturated FFA as compared to C2C12 cells. These results show that in muscle cells saturated FFA-induced mitochondrial dysfunction associated with impaired insulin-induced glucose metabolism.