Insulin resistance is a key feature of the metabolic syndrome and often progresses to type 2 diabetes. Both insulin resistance and type 2 diabetes are characterized by dyslipidemia, which is an important and common risk factor for cardiovascular disease. Diabetic dyslipidemia is a cluster of potentially atherogenic lipid and lipoprotein abnormalities that are metabolically interrelated. Recent evidence suggests that a fundamental defect is an overproduction of large very low–density lipoprotein (VLDL) particles, which initiates a sequence of lipoprotein changes, resulting in higher levels of remnant particles, smaller LDL, and lower levels of high-density liporotein (HDL) cholesterol. These atherogenic lipid abnormalities precede the diagnosis of type 2 diabetes by several years, and it is thus important to elucidate the mechanisms involved in the overproduction of large VLDL particles. Here, we review the pathophysiology of VLDL biosynthesis and metabolism in the metabolic syndrome. We also review recent research investigating the relation between hepatic accumulation of lipids and insulin resistance, and sources of fatty acids for liver fat and VLDL biosynthesis. Finally, we briefly discuss current treatments for lipid management of dyslipidemia and potential future therapeutic targets.