A high-fat diet (HFD) and inflammation are key contributors to insulin resistance and type 2 diabetes (T2D). The study shows that saturated fatty acid palmitate, but not unsaturated oleate, activates the NLRP3-PYCARD inflammasome, leading to caspase-1, IL-1β, and IL-18 production. This activation involves mitochondrial reactive oxygen species (ROS) and the AMP-activated protein kinase (AMPK) and ULK1 autophagy signaling cascade. Inflammasome activation in hematopoietic cells impairs insulin signaling in multiple target tissues, reducing glucose tolerance and insulin sensitivity. IL-1β affects insulin sensitivity via TNF-independent and dependent pathways. The study reveals that fatty acid-induced inflammasome activation is linked to inflammation, diet, and T2D. The inflammasome activation is mediated by AMPK-ROS signaling, which is involved in autophagy and mitochondrial ROS production. IL-1β produced by the inflammasome impairs insulin signaling in insulin target tissues, contributing to insulin resistance. The study also shows that NLRP3 inflammasome activation in myeloid cells promotes insulin resistance in a HFD-induced model. The findings suggest that the NLRP3-PYCARD inflammasome plays a critical role in the development of insulin resistance and T2D by impairing insulin signaling. The study provides insights into the mechanisms by which fatty acids and inflammation contribute to T2D.A high-fat diet (HFD) and inflammation are key contributors to insulin resistance and type 2 diabetes (T2D). The study shows that saturated fatty acid palmitate, but not unsaturated oleate, activates the NLRP3-PYCARD inflammasome, leading to caspase-1, IL-1β, and IL-18 production. This activation involves mitochondrial reactive oxygen species (ROS) and the AMP-activated protein kinase (AMPK) and ULK1 autophagy signaling cascade. Inflammasome activation in hematopoietic cells impairs insulin signaling in multiple target tissues, reducing glucose tolerance and insulin sensitivity. IL-1β affects insulin sensitivity via TNF-independent and dependent pathways. The study reveals that fatty acid-induced inflammasome activation is linked to inflammation, diet, and T2D. The inflammasome activation is mediated by AMPK-ROS signaling, which is involved in autophagy and mitochondrial ROS production. IL-1β produced by the inflammasome impairs insulin signaling in insulin target tissues, contributing to insulin resistance. The study also shows that NLRP3 inflammasome activation in myeloid cells promotes insulin resistance in a HFD-induced model. The findings suggest that the NLRP3-PYCARD inflammasome plays a critical role in the development of insulin resistance and T2D by impairing insulin signaling. The study provides insights into the mechanisms by which fatty acids and inflammation contribute to T2D.