Fatty acids are a major fuel source used to sustain contractile function in heart and oxidative skeletal muscle. To meet the energy demands of these muscles, the uptake and beta-oxidation of fatty acids must be coordinately regulated in order to ensure an adequate, but not excessive, supply for mitochondrial beta-oxidation. However, imbalance between fatty acid uptake and beta-oxidation has the potential to contribute to muscle insulin resistance. The action of insulin is initiated by binding to its receptor and activation of the intrinsic protein tyrosine kinase activity of the receptor, resulting in the initiation of an intracellular signaling cascade that eventually leads to insulin-mediated alterations in a number of cellular processes, including an increase in glucose transport. Accumulation of fatty acids and lipid metabolites (such as long chain acyl CoA, diacylglycerol, triacylglycerol, and/or ceramide) can lead to alterations in this insulin signaling pathway. An imbalance between fatty acid uptake and oxidation is believed to be responsible for this lipid accumulation, and is thought to be a major cause of insulin resistance in obesity and diabetes, due to lipid accumulation and inhibition of one or more steps in the insulin-signaling cascade. As a result, decreasing muscle fatty acid uptake can improve insulin sensitivity. However, the potential role of increasing fatty acid beta-oxidation in the heart or skeletal muscle in order to prevent cytoplasmic lipid accumulation and decrease insulin resistance is controversial. While increased fatty acid beta-oxidation may lower cytoplasmic lipid accumulation, increasing fatty acid beta-oxidation can decrease muscle glucose metabolism, and incomplete fatty acid oxidation has the potential to also contribute to insulin resistance. In this review, we discuss the proposed mechanisms by which alterations in fatty acid uptake and oxidation contribute to insulin resistance, and how targeting fatty acid uptake and oxidation is a potential therapeutic approach to treat insulin resistance.