The fasting concentration of non-esterified fatty acids (NEFA) and the degree to which it declines during an oral glucose tolerance test are closely associated with insulin resistance and glucose intolerance. However, relatively few studies have described possible environmental determinants of NEFA concentrations. Physical activity is likely to be related to NEFA levels, but habitual activity level is difficult to quantify in epidemiological studies. In particular, it is unclear whether NEFA is more closely related to cardio-respiratory fitness or to habitual energy expenditure. In order to quantify these relationships, we analysed data from the Ely prospective population-based study in which 931 subjects underwent a glucose tolerance test with measurements of cardio-respiratory fitness and 4 d energy expenditure by heart-rate monitoring, a technique previously validated against whole-body calorimetry and doubly-labelled water. In order to estimate the latent variables of usual fitness and energy expenditure, a subset of 190 subjects underwent repeat testing on three further occasions over 1 year. In analyses adjusting only for age and sex, energy expenditure and cardio-respiratory fitness were both negatively correlated with the total area under the NEFA curve following the oral glucose load (standardised β coefficients -0·030 and -0·039 respectively; both P<0·001) However, further adjustment for degree of obesity and bivariate measurement error suggested that the effect of energy expenditure was significantly greater than that for fitness (-0·047 and -0·005 respectively). These results suggest that the area under the NEFA curve in the oral glucose tolerance test, a measure of insulin sensitivity, is strongly associated with the habitual level of physical activity.