Obesity is often associated with metabolic impairments in peripheral tissues. Evidence suggests an excess of free fatty acids (FFA) as one factor linking obesity and related pathological conditions and the impact of FFA overload on skeletal muscle metabolism is described herein. Obesity is associated with dysfunctional adipose tissue unable to buffer the flux of dietary lipids. Resulting increased levels and fluxes of plasma FFA lead to ectopic lipid deposition and lipotoxicity. FFA accumulated in skeletal muscle are associated with insulin resistance and overall cellular dysfunction. Mechanisms supposed to be involved in these conditions include the Randle cycle, intracellular accumulation of lipid metabolites, inflammation and mitochondrial dysfunction or mitochondrial stress. These mechanisms are described and discussed in the view of current experimental evidence with an emphasis on conflicting theories of decreased vs. increased mitochondrial fat oxidation associated with lipid overload. Since different types of FFA may induce diverse metabolic responses in skeletal muscle cells, this review also focuses on cellular mechanisms underlying the different action of saturated and unsaturated FFA.