Malonyl CoA is an inhibitor of carnitine palmitoyl transferase 1 (CPT1), the enzyme that regulates the transfer of long chain fatty acyl CoA into mitochondria. By virtue of this effect, it is thought to play a key role in regulating fatty acid oxidation. Thus, when the supply of glucose to muscle is increased, malonyl CoA levels increase in keeping with a decreased need for fatty acid oxidation, and fatty acids are preferentially esterified to form diaglycerol and triglycerides. In contrast, during exercise, when the need for fatty acid oxidation is increased, malonyl CoA levels fall. Changes in glucose supply regulate malonyl CoA by modulating the concentration of cytosolic citrate, an allosteric activator of acetyl CoA carboxylase (ACC), the rate-limiting enzyme for malonyl CoA formation and a precursor of its substrate cytosolic acetyl CoA. Conversely, exercise lowers the concentration of malonyl CoA, by activating an AMP-activated protein kinase, which phosphorylates and inhibits ACC. A number of reports have linked sustained increases in the concentration of malonyl CoA in muscle to insulin resistance. In this paper, we review these reports, as well as the notion that changes in malonyl CoA contribute to the increases in long chain fatty acyl CoA, (LCFA CoA), diacylglycerol and triglyceride content and changes in protein kinase C activity and distribution observed in insulin-resistant muscle. We also review the implications of the malonyl CoA/LCFA CoA hypothesis to two other proposed mechanisms for insulin resistance, the glucose-fatty acid cycle and the hexosamine theory.