We determined whole-body insulin sensitivity, long-chain fatty acyl coenzyme A (LCACoA) content, skeletal muscle triglyceride (TG_m) concentration, fatty acid transporter protein content, and oxidative enzyme activity in eight patients with type 2 diabetes (TYPE 2); six healthy control subjects matched for age (OLD), body mass index, percentage of body fat, and maximum pulmonary O₂ uptake; nine well-trained athletes (TRAINED); and four age-matched controls (YOUNG). Muscle biopsies from the vastus lateralis were taken before and after a 2-h euglycemic-hyperinsulinemic clamp. Oxidative enzyme activities, fatty acid transporters (FAT/CD36 and FABPpm), and TG_m were measured from basal muscle samples, and total LCACoA content was determined before and after insulin stimulation. Whole-body insulin-stimulated glucose uptake was lower in TYPE 2 (P < 0.05) than in OLD, YOUNG, and TRAINED. TG_m was elevated in TYPE 2 compared with all other groups (P < 0.05). However, both basal and insulin-stimulated skeletal muscle LCACoA content were similar. Basal citrate synthase activity was higher in TRAINED (P < 0.01), whereas β-hydroxyacyl CoA dehydrogenase activity was higher in TRAINED compared with TYPE 2 and OLD. There was a significant relationship between the oxidative capacity of skeletal muscle and insulin sensitivity (citrate synthase, r = 0.71, P < 0.001; β-hydroxyacyl CoA dehydrogenase, r = 0.61, P = 0.001). No differences were found in FAT/CD36 protein content between groups. In contrast, FABPpm protein was lower in OLD compared with TYPE 2 and YOUNG (P < 0.05). In conclusion, despite markedly elevated skeletal muscle TG_m in type 2 diabetic patients and strikingly different levels of whole-body glucose disposal, both basal and insulin-stimulated LCACoA content were similar across groups. Furthermore, skeletal muscle oxidative capacity was a better predictor of insulin sensitivity than either TG_m concentration or long-chain fatty acyl CoA content.