Fatty acid oversupply is a key mediator of skeletal muscle insulin resistance in obesity, primarily via accumulation of fatty acid metabolites and activation of proinflammatory pathways. Herein, we demonstrate that fatty acid–induced insulin resistance in humans is completely prevented the day after 1 session of endurance exercise. Because skeletal muscle is the primary site for systemic glucose disposal and is highly susceptible to impaired insulin action by elevated fatty acid availability, we obtained skeletal muscle samples to investigate possible mechanisms mediating this protective effect of exercise. Prevention of fatty acid–induced insulin resistance after exercise accompanied enhanced skeletal muscle protein expression of key lipogenic enzymes and an increase in muscle triglyceride synthesis. Partitioning more fatty acids toward triglyceride synthesis within muscle reduced the accumulation of fatty acid metabolites and suppressed the proinflammatory response in skeletal muscle, as evidenced by decreased phosphorylation and activation of JNK and increased abundance of inhibitor of NF-κB α (IκB-α) and IκB-β. We believe this is the first study to demonstrate that 1 session of exercise completely reverses fatty acid–induced insulin resistance in humans. Reversal of insulin resistance accompanied enhanced lipogenic capacity within skeletal muscle, reduced accumulation of highly bioactive fatty acid metabolites, and suppressed activation of proinflammatory pathways known to impair insulin action.