Skeletal muscle insulin resistance has been implicated in the pathogenesis of nonalcoholic fatty liver disease (NAFLD) and atherogenic dyslipidemia associated with the metabolic syndrome by altering the distribution pattern of postprandial energy storage. We conducted a study to examine this hypothesis by reversing muscle insulin resistance with a single bout of exercise and measuring hepatic de novo lipogenesis and hepatic triglyceride synthesis after a carbohydrate-rich meal. We studied 12 healthy, young, lean, insulin resistant individuals in an interventional, randomized cross-over trial. The response to the ingestion of a carbohydrate-rich meal was studied at rest and after one 45-min bout of exercise on an elliptical trainer. Hepatic de novo lipogenesis was assessed by using ²H₂O, and changes in glycogen and fat content in liver and muscle were measured by ¹³C and ¹H magnetic resonance spectroscopy, respectively. Exercise resulted in a greater than threefold increase in postprandial net muscle glycogen synthesis (P < 0.001), reflecting improved muscle insulin responsiveness, and a ≈40% reduction (P < 0.05) in net hepatic triglyceride synthesis. These changes in whole body energy storage were accompanied by a ≈30% decrease in hepatic de novo lipogenesis (P < 0.01) and were independent of changes in fasting or postprandial plasma glucose and insulin concentrations. These data demonstrate that skeletal muscle insulin resistance is an early therapeutic target for the treatment and prevention of atherogenic dyslipidemia and NAFLD in young insulin resistant individuals who are prone to develop the metabolic syndrome and type 2 diabetes.