Insulin resistance in skeletal muscle is present in humans with type 2 diabetes (noninsulin-dependent diabetes mellitus) and obesity and in rodents with these disorders. Malonyl CoA is a regulator of carnitine palmitoyl transferase I (CPT I), the enzyme that controls the transfer of long chain fatty acyl CoA into mitochondria where it is oxidized. In rat skeletal muscle, the formation of malonyl CoA is regulated acutely (in minutes) by changes in the activity of acetyl CoA carboxylase (ACC), the enzyme that catalyzes malonyl CoA synthesis. Acc activity can be regulated by changes in the concentration of citrate which is both an allosteric activator of Acc and a source of its precursor, cytosolic acetyl CoA. Increases in cytosolic citrate leading to an increase in the concentration of malonyl CoA occur when muscle is presented with insulin and glucose, or when it is made inactive by denervation. In contrast, exercise lowers the concentration of malonyl CoA, by activating an AMP activated protein kinase (AMPK), which phosphorylates and inhibits ACC. Recently we have shown that the activity of malonyl CoA decarboxylase (MCD), an enzyme that degrades malonyl CoA, is also regulated by phosphorylation. The concentration of malonyl CoA in liver and muscle in certain circumstances correlates inversely with changes in MCD activity. This review will describe the current literature on the regulation of malonyl CoA/AMPK mechanism and its physiological function.