OBJECTIVE The objective of the study was to examine the effects of an exercise/diet lifestyle intervention on free fatty acid (FFA)-induced hepatic insulin resistance in obese humans. METHODS Obese men and women (n = 23) with impaired glucose tolerance were randomly assigned to either exercise training with a eucaloric (EU; approximately 1800 kcal; n = 11) or hypocaloric (HYPO; approximately 1300 kcal; n = 12) diet for 12 wk. Hepatic glucose production (HGP; milligrams per kilogram fat-free mass(-1) per minute(-1)) and hepatic insulin resistance were determined using a two-stage sequential hyperinsulinemic (40 mU/m(2) . min(-1)) euglycemic (5.0 mm) clamp with [3-(3)H]glucose. Measures were obtained at basal, during insulin infusion (INS; 120 min), and insulin plus intralipid/heparin infusion (INS/FFA; 300 min). RESULTS At baseline, basal HGP was similar between groups; hyperinsulinemia alone did not completely suppress HGP, whereas INS/FFA exhibited less suppression than INS (EU, 4.6 +/- 0.8, 2.0 +/- 0.5, and 2.6 +/- 0.4; HYPO, 3.8 +/- 0.5, 1.2 +/- 0.3, and 2.3 +/- 0.4, respectively). After the intervention the HYPO group lost more body weight (P < 0.05) and fat mass (P < 0.05). However, both lifestyle interventions reduced hepatic insulin resistance during basal (P = 0.005) and INS (P = 0.001) conditions, and insulin-mediated suppression of HGP during INS was equally improved in both groups (EU: -42 +/- 22%; HYPO: -50 +/- 20%, before vs. after, P = 0.02). In contrast, the ability of insulin to overcome FFA-induced hepatic insulin resistance and HGP was improved only in the HYPO group (EU: -15 +/- 24% vs. HYPO: -58 +/- 19%, P = 0.02). CONCLUSIONS Both lifestyle interventions are effective in reducing hepatic insulin resistance under basal and hyperinsulinemic conditions. However, the reversal of FFA-induced hepatic insulin resistance is best achieved with a combined exercise/caloric-restriction intervention.