Obesity results in an increased flux of free fatty acids into the circulation and uptake by the myocyte or hepatocyte. Activated fatty acids (i.e., fatty acyl-CoAs) are “metabolized” primarily via one of two pathways, oxidation or storage. When fatty acid flux exceeds the ability of these pathways to dispose of fatty acyl-CoAs, intermediaries of fatty acid metabolism (e.g., DAG, PA, LPA, ceramide) accumulate. In turn, these fatty acid intermediates can activate a number of different serine kinases that can negatively regulate insulin action. Ceramide can also impair insulin action through interactions with PKB/Akt. An inability to completely oxidize fatty acids through β-oxidation, which leads to an accumulation of acylcarnitines, has also been hypothesized to cause insulin resistance, although the precise mechanisms leading to insulin resistance are, to date, unknown. AGPAT, acylglycerol-3-phosphate acyltransferase; PAP, PA phosphohydrolase.