Insulin resistance is a pivotal feature in the pathogenesis of type 2 diabetes, and it may be detected 10–20 y before the clinical onset of hyperglycemia. Insulin resistance is due to the reduced ability of peripheral target tissues to respond properly to insulin stimulation. In particular, impaired insulin-stimulated muscle glycogen synthesis plays a significant role in insulin resistance. Glucose transport (GLUT4), phosphorylation (hexokinase) and storage (glycogen synthase) are the three potential rate-controlling steps regulating insulin-stimulated muscle glucose metabolism, and all three have been implicated as being the major defects responsible for causing insulin resistance in patients with type 2 diabetes. Using 13 C/31 P magnetic resonance spectroscopy (MRS), we demonstrate that a defect in insulin-stimulated muscle glucose transport activity is the rate-controlling defect. Using a similar 13 C/31 P MRS approach, we have also demonstrated that fatty acids cause insulin resistance in humans due to a decrease in insulin-stimulated muscle glucose transport activity, which could be attributed to reduced insulin-stimulated IRS-1-associated phosphatidylinositol 3-kinase activity, a required step in insulin-stimulated glucose transport into muscle. Furthermore, we have recently proposed that this defect in insulin-stimulated muscle glucose transport activity may be due to the activation of a serine kinase cascade involving protein kinase Cθ and IKK-β, which are key downstream mediators of tissue inflammation. Finally, we propose that any perturbation that leads to an increase in intramyocellular lipid (fatty acid metabolites) content such as acquired or inherited defects in mitochondrial fatty acid oxidation, defects in adipocyte fat metabolism or simply increased fat delivery to muscle/liver due to increased energy intake will lead to insulin resistance through this final common pathway. Understanding these key cellular mechanisms of insulin resistance should help elucidate new targets for treating type 2 diabetes.