Recent studies using magnetic resonance spectroscopy have shown that decreased insulin-stimulated muscle glycogen synthesis due to a defect in insulin-stimulated glucose transport activity is a major factor in the pathogenesis of type 2 diabetes. The molecular mechanism underlying defective insulin-stimulated glucose transport activity can be attributed to increases in intramyocellular lipid metabolites such as fatty acyl CoAs and diacylglycerol, which in turn activate a serine/threonine kinase cascade, thus leading to defects in insulin signaling through Ser/Thr phosphorylation of insulin receptor substrate (IRS)-1. A similar mechanism is also observed in hepatic insulin resistance associated with nonalcoholic fatty liver, which is a common feature of type 2 diabetes, where increases in hepatocellular diacylglycerol content activate protein kinase C-epsilon, leading to reduced insulin-stimulated tyrosine phosphorylation of IRS-2. More recently, magnetic resonance spectroscopy studies in healthy lean elderly subjects and healthy lean insulin-resistant offspring of parents with type 2 diabetes have demonstrated that reduced mitochondrial function may predispose these individuals to intramyocellular lipid accumulation and insulin resistance. Further analysis has found that the reduction in mitochondrial function in the insulin-resistant offspring can be mostly attributed to reductions in mitochondrial density. By elucidating the cellular and molecular mechanisms responsible for insulin resistance, these studies provide potential new targets for the treatment and prevention of type 2 diabetes.