Lipotoxicity in skeletal muscle plays a critical role in the aetiology of insulin resistance and type 2 diabetes mellitus by interference of lipid metabolites with insulin signalling and action. The dynamics of lipid oxidation and fine tuning with fatty acid uptake and intramyocellular triacylglycerol turnover may be very important to limit the accumulation of lipid intermediates. The use of metabolic inflexibility, defined as the impaired capacity to increase fat oxidation upon increased fatty acid availability and to switch between fat and glucose as the primary fuel source after a meal, does more justice to the complexity of changes in fuel oxidation during the day. Fatty acid availability, uptake and oxidation all play a role in metabolic flexibility and insulin resistance. During high fatty acid availability, fatty acid transporters may limit cellular and mitochondrial fatty acid uptake and thus limit fat oxidation. After a meal, when the demand for fatty acids as fuel is low, an increased fractional extraction of lipids from plasma may promote intramyocellular lipid accumulation and insulin resistance. Furthermore, defects in fuel switching cluster together with impaired mitochondrial content and/or function. Lifestyle changes in dietary fat intake, physical activity and weight loss may improve metabolic flexibility in skeletal muscle, and thereby contribute to the prevention of type 2 diabetes.