Insulin resistance is a major metabolic defect associated with obesity and type 2 diabetes. Although many factors have been proposed to mediate a desensitisation of tissues to the actions of insulin, one key perturbation is aberrant accumulation of lipid. In particular, lipid metabolites such as diacyglycerols and ceramides are considered highly deleterious, however with advancements in analytical techniques it is becoming clear that the effects of these lipids can be varied depending on the specific molecular species present, as well as other factors such as the subcellular distribution. Drawing on work from our group and others I will discuss some of the key issues and controversies in this field.