Type 2 diabetes is characterized by hyperlipidemia, hyperinsulinemia, and insulin resistance. The aim of this study was to investigate whether acute hyperlipidemia-induced insulin resistance in the presence of hyperinsulinemia was due to defective insulin signaling. Hyperinsulinemia (∼300 mU/l) with hyperlipidemia or glycerol (control) was produced in cannulated male Wistar rats for 0.5, 1 h, 3 h, or 5 h. The glucose infusion rate required to maintain euglycemia was significantly reduced by 3 h with lipid infusion and was further reduced after 5 h of infusion, with no difference in plasma insulin levels, indicating development of insulin resistance. Consistent with this finding, in vivo skeletal muscle glucose uptake (31%, P < 0.05) and glycogen synthesis rate (38%, P < 0.02) were significantly reduced after 5 h compared with 3 h of lipid infusion. Despite the development of insulin resistance, there was no difference in the phosphorylation state of multiple insulin-signaling intermediates or muscle diacylglyceride and ceramide content over the same time course. However, there was an increase in cumulative exposure to long-chain acyl-CoA (70%) with lipid infusion. Interestingly, although muscle pyruvate dehydrogenase kinase 4 protein content was decreased in hyperinsulinemic glycerol-infused rats, this decrease was blunted in muscle from hyperinsulinemic lipid-infused rats. Decreased pyruvate dehydrogenase complex activity was also observed in lipid- and insulin-infused animals (43%). Overall, these results suggest that acute reductions in muscle glucose metabolism in rats with hyperlipidemia and hyperinsulinemia are more likely a result of substrate competition than a significant early defect in insulin action or signaling.