Lipids are the most abundant organic constituents in many humans. The rise in obesity prevalence has prompted a need for a more refined understanding of the effects of lipid molecules on cell physiology. In skeletal muscle, deposition of lipids can be associated with insulin resistance that contributes to the development of diabetes. Here, we review the evidence that muscle cells are equipped with the molecular machinery to convert and sequester lipid molecules, thus rendering them harmless. Induction of mitochondrial and lipogenic flux in the setting of elevated lipid deposition can protect muscle from lipid-induced “poisoning” of the cellular machinery. Lipid flux may also be directed toward the synthesis of ligands for nuclear receptors, further enhancing the capacity of muscle for lipid metabolism to promote favorable physiology. Exploiting these mechanisms may have implications for the treatment of obesity-related diseases.