Mitochondrial dysfunction in skeletal muscle has been implicated in the development of insulin resistance and type 2 diabetes. Considering the importance of mitochondrial dynamics in mitochondrial and cellular functions, we hypothesized that obesity and excess energy intake shift the balance of mitochondrial dynamics, further contributing to mitochondrial dysfunction and metabolic deterioration in skeletal muscle. First, we revealed that excess palmitate (PA), but not hyperglycemia, hyperinsulinemia, or elevated tumor necrosis factor alpha, induced mitochondrial fragmentation and increased mitochondrion-associated Drp1 and Fis1 in differentiated C2C12 muscle cells. This fragmentation was associated with increased oxidative stress, mitochondrial depolarization, loss of ATP production, and reduced insulin-stimulated glucose uptake. Both genetic and pharmacological inhibition of Drp1 attenuated PA-induced mitochondrial fragmentation, mitochondrial depolarization, and insulin resistance in C2C12 cells. Furthermore, we found smaller and shorter mitochondria and increased mitochondrial fission machinery in the skeletal muscle of mice with genetic obesity and those with diet-induced obesity. Inhibition of mitochondrial fission improved the muscle insulin signaling and systemic insulin sensitivity of obese mice. Our findings indicated that aberrant mitochondrial fission is causally associated with mitochondrial dysfunction and insulin resistance in skeletal muscle. Thus, disruption of mitochondrial dynamics may underlie the pathogenesis of muscle insulin resistance in obesity and type 2 diabetes.