The association of hepatic steatosis with hepatic insulin resistance and type 2 diabetes has prompted investigators to elucidate the underlying mechanism. In this review we focus on pathways of lipid metabolism, and we review recent data, primarily from mouse models, that link lipid intermediates with insulin resistance. Most of the studies that implicate acyl-CoA, lysophosphatidic acid, phosphatidic acid, diacylglycerol, or ceramide rely on indirect associations. Convincing data to support the hypothesis that specific lipid intermediates initiate pathways that alter insulin signaling will require studies in which the concentration of each purported signaling molecule can be manipulated independently.