The obese insulin resistant and/or prediabetic state is characterised by systemic lipid overflow, mainly driven by an impaired lipid buffering capacity of adipose tissue, and an impaired capacity of skeletal muscle to increase fat oxidation upon increased supply. This leads to the accumulation of bioactive lipid metabolites in skeletal muscle interfering with insulin sensitivity via various mechanisms. In this review, the contribution of dietary v. endogenous fatty acids to lipid overflow, their extraction or uptake by skeletal muscle as well as the fractional synthetic rate, content and composition of the muscle lipid pools is discussed in relation to the development or presence of insulin resistance and/or an impaired glucose metabolism. These parameters are studied in vivo in man by combining a dual stable isotope methodology with [2H2]- and [U-13C]-palmitate tracers with the arterio-venous balance technique across forearm muscle and biochemical analyses in muscle biopsies. The insulin-resistant state is characterised by an elevated muscle TAG extraction, despite similar supply, and a reduced skeletal muscle lipid turnover, in particular after intake of a high fat, SFA fat meal, but not after a high fat, PUFA meal. Data are placed in the context of current literature, and underlying mechanisms and implications for long-term nutritional interventions are discussed.