Type 2 diabetes is rapidly becoming a worldwide epidemic. Obesity and sedentary lifestyle are the main environmental causes for the development of insulin resistance and type 2 diabetes. In the past decade, it has been increasingly recognized that obesity and insulin resistance are associated with chronic, low-grade systemic inflammation. This review will cover the recent advances in this field and provide a working model explaining how cellular inflammatory responses arise to cope with obesity-induced metabolic stresses and how these inflammatory responses underlie insulin resistance.