The circulating level of the inflammatory cytokine interleukin (IL)-6 is elevated in various insulin-resistant states including type 2 diabetes, obesity, cancer, and HIV-associated lipodystrophy. To determine the role of IL-6 in the development of insulin resistance, we examined the effects of IL-6 treatment on whole-body insulin action and glucose metabolism in vivo during hyperinsulinemic-euglycemic clamps in awake mice. Pretreatment of IL-6 blunted insulin’s ability to suppress hepatic glucose production and insulin-stimulated insulin receptor substrate (IRS)-2–associated phosphatidylinositol (PI) 3-kinase activity in liver. Acute IL-6 treatment also reduced insulin-stimulated glucose uptake in skeletal muscle, and this was associated with defects in insulin-stimulated IRS-1–associated PI 3-kinase activity and increases in fatty acyl-CoA levels in skeletal muscle. In contrast, we found that co-treatment of IL-10, a predominantly anti-inflammatory cytokine, prevented IL-6–induced defects in hepatic insulin action and signaling activity. Additionally, IL-10 co-treatment protected skeletal muscle from IL-6 and lipid-induced defects in insulin action and signaling activity, and these effects were associated with decreases in intramuscular fatty acyl-CoA levels. This is the first study to demonstrate that inflammatory cytokines IL-6 and IL-10 alter hepatic and skeletal muscle insulin action in vivo, and the mechanism may involve cytokine-induced alteration in intracellular fat contents. These findings implicate an important role of inflammatory cytokines in the pathogenesis of insulin resistance.