Skeletal muscle insulin resistance is a co-morbidity of obesity and a risk factor for the development of type 2 diabetes mellitus. Insulin resistance is associated with the accumulation of intramyocellular lipids. Intramyocellular triacylglycerols do not appear to be the cause of insulin resistance but are more likely to be a marker of other lipid intermediates such as fatty acyl-CoA, ceramides or diacylglycerols. Fatty acyl-CoA, ceramides and diacylglycerols are known to directly alter various aspects of the insulin signalling cascade. Insulin signalling is inhibited by the phosphorylation of serine and threonine residues at the levels of the insulin receptor and insulin receptor substrate 1. Protein kinase C is responsible for the phosphorylation of the serine and threonine residues. Fatty acyl-CoA and diacylglycerols are known to activate protein kinase C. The cause of the intramyocellular accumulation of fatty acyl-CoA and diacylglycerols is unclear at this time. Reduced fatty acid oxidation does not appear to be responsible, as fatty acyl-CoA accumulates in skeletal muscle with a normal fatty acid oxidative capacity. Other potential mechanisms include oversupply of lipids to muscle and/or up regulated fatty acid transport.