Insulin resistance occurs in 20%-25% of the human population, and the condition is a chief component of type 2 diabetes mellitus and a risk factor for cardiovascular disease and certain forms of cancer. Herein, we demonstrate that the sphingolipid ceramide is a common molecular intermediate linking several different pathological metabolic stresses (i.e., glucocorticoids and saturated fats, but not unsaturated fats) to the induction of insulin resistance. Moreover, inhibition of ceramide synthesis markedly improves glucose tolerance and prevents the onset of frank diabetes in obese rodents. Collectively, these data have two important implications. First, they indicate that different fatty acids induce insulin resistance by distinct mechanisms discerned by their reliance on sphingolipid synthesis. Second, they identify enzymes required for ceramide synthesis as therapeutic targets for combating insulin resistance caused by nutrient excess or glucocorticoid therapy.