Reduced storage of dietary fatty acids (DFAs) in abdominal adipose tissues with enhanced cardiac partitioning has been shown in subjects with type 2 diabetes (T2D) and prediabetes. We measured DFA metabolism and organ partitioning using positron emission tomography with oral and intravenous long-chain fatty acid and glucose tracers during a standard liquid meal in 12 obese subjects with T2D before and 8–12 days after bariatric surgery (sleeve gastrectomy or sleeve gastrectomy and biliopancreatic diversion with duodenal switch). Bariatric surgery reduced cardiac DFA uptake from a median (standard uptake value [SUV]) 1.75 (interquartile range 1.39–2.57) before to 1.09 (1.04–1.53) after surgery (P = 0.01) and systemic DFA spillover from 56.7 mmol before to 24.7 mmol over 6 h after meal intake after surgery (P = 0.01), with a significant increase in intra-abdominal adipose tissue DFA uptake from 0.15 (0.04–0.31] before to 0.49 (0.20–0.59) SUV after surgery (P = 0.008). Hepatic insulin resistance was significantly reduced in close association with increased DFA storage in intra-abdominal adipose tissues (r = −0.79, P = 0.05) and reduced DFA spillover (r = 0.76, P = 0.01). We conclude that bariatric surgery in subjects with T2D rapidly reduces cardiac DFA partitioning and hepatic insulin resistance at least in part through increased intra-abdominal DFA storage and reduced spillover.