Insulin resistance arises when nutrient storage pathways, evolved for efficient energy utilization, are exposed to chronic energy surplus. Ectopic lipid accumulation in liver and skeletal muscle impairs insulin signaling, reducing glucose uptake in muscle and hepatic glycogen synthesis. Muscle insulin resistance precedes liver insulin resistance, diverting glucose to the liver, increasing hepatic de novo lipogenesis and hyperlipidemia. Macrophage infiltration into white adipose tissue (WAT) increases lipolysis, further increasing hepatic triglyceride synthesis and hyperlipidemia. Macrophage-induced WAT lipolysis also stimulates hepatic gluconeogenesis, promoting fasting and postprandial hyperglycemia. These processes are mostly independent of insulin signaling in the liver but depend on insulin signaling in WAT, which becomes defective with inflammation. Therapies that decrease ectopic lipid storage and diminish macrophage-induced WAT lipolysis can reverse the root causes of type 2 diabetes (T2D). In modern society, calorie availability is high, leading to obesity and comorbid conditions like nonalcoholic fatty liver disease (NAFLD), atherosclerosis, and T2D. Insulin resistance is a common feature of these diseases. Postprandial hepatic glucose and lipid metabolism shift from glucose production to storage, regulated by insulin, nutrients, and hormones. Insulin activates glycogen synthase and decreases gluconeogenic enzyme expression. Insulin resistance in the liver is linked to DAG-mediated activation of PKCε, impairing insulin signaling. In skeletal muscle, DAG-mediated activation of PKCθ impairs insulin signaling, reducing glucose uptake and diverting glucose to the liver. Exercise promotes glucose uptake in muscle. WAT glucose uptake is insulin-dependent and regulated by similar pathways as in skeletal muscle. Ectopic lipid accumulation in skeletal muscle is associated with insulin resistance. IMCL content is a better predictor of muscle insulin resistance than fat mass. Increased fatty acid oxidation limits insulin-stimulated glucose utilization. Noninvasive studies show that fatty acids impair insulin-stimulated glucose metabolism by blocking glucose transport, not glycolysis. IMCL accumulation occurs when lipid oxidation and delivery are mismatched. Mitochondrial dysfunction in elderly subjects is linked to increased IMCL and reduced mitochondrial activity. Muscle mitochondrial oxidative and phosphorylation activity is reduced in insulin-resistant offspring of T2D patients. Cellular mechanisms of muscle insulin resistance involve DAG accumulation activating PKCθ, impairing insulin signaling. Muscle insulin resistance leads to metabolic disease, with glucose diverted to the liver, increasing hepatic de novo lipogenesis and triglyceride synthesis. Hepatic insulin resistance is linked to DAG accumulation and PKCε activation. In fat-fed rats, increased hepatic DAG activates PKCε, impairing IRTK activation. Hepatic insulin resistance is associated with increased hepatic DAG and PKCε activation. In humans, hepatic DAG content and PKCε activation are strong predictors ofInsulin resistance arises when nutrient storage pathways, evolved for efficient energy utilization, are exposed to chronic energy surplus. Ectopic lipid accumulation in liver and skeletal muscle impairs insulin signaling, reducing glucose uptake in muscle and hepatic glycogen synthesis. Muscle insulin resistance precedes liver insulin resistance, diverting glucose to the liver, increasing hepatic de novo lipogenesis and hyperlipidemia. Macrophage infiltration into white adipose tissue (WAT) increases lipolysis, further increasing hepatic triglyceride synthesis and hyperlipidemia. Macrophage-induced WAT lipolysis also stimulates hepatic gluconeogenesis, promoting fasting and postprandial hyperglycemia. These processes are mostly independent of insulin signaling in the liver but depend on insulin signaling in WAT, which becomes defective with inflammation. Therapies that decrease ectopic lipid storage and diminish macrophage-induced WAT lipolysis can reverse the root causes of type 2 diabetes (T2D). In modern society, calorie availability is high, leading to obesity and comorbid conditions like nonalcoholic fatty liver disease (NAFLD), atherosclerosis, and T2D. Insulin resistance is a common feature of these diseases. Postprandial hepatic glucose and lipid metabolism shift from glucose production to storage, regulated by insulin, nutrients, and hormones. Insulin activates glycogen synthase and decreases gluconeogenic enzyme expression. Insulin resistance in the liver is linked to DAG-mediated activation of PKCε, impairing insulin signaling. In skeletal muscle, DAG-mediated activation of PKCθ impairs insulin signaling, reducing glucose uptake and diverting glucose to the liver. Exercise promotes glucose uptake in muscle. WAT glucose uptake is insulin-dependent and regulated by similar pathways as in skeletal muscle. Ectopic lipid accumulation in skeletal muscle is associated with insulin resistance. IMCL content is a better predictor of muscle insulin resistance than fat mass. Increased fatty acid oxidation limits insulin-stimulated glucose utilization. Noninvasive studies show that fatty acids impair insulin-stimulated glucose metabolism by blocking glucose transport, not glycolysis. IMCL accumulation occurs when lipid oxidation and delivery are mismatched. Mitochondrial dysfunction in elderly subjects is linked to increased IMCL and reduced mitochondrial activity. Muscle mitochondrial oxidative and phosphorylation activity is reduced in insulin-resistant offspring of T2D patients. Cellular mechanisms of muscle insulin resistance involve DAG accumulation activating PKCθ, impairing insulin signaling. Muscle insulin resistance leads to metabolic disease, with glucose diverted to the liver, increasing hepatic de novo lipogenesis and triglyceride synthesis. Hepatic insulin resistance is linked to DAG accumulation and PKCε activation. In fat-fed rats, increased hepatic DAG activates PKCε, impairing IRTK activation. Hepatic insulin resistance is associated with increased hepatic DAG and PKCε activation. In humans, hepatic DAG content and PKCε activation are strong predictors of