OBJECTIVE Mechanisms impairing wound healing in diabetes are poorly understood. To identify mechanisms, we induced insulin resistance by chronically feeding mice a high-fat diet (HFD). We also examined the regulation of phosphatidylinositol 3,4,5-trisphosphate (PIP(3)) during muscle regeneration because augmented IGF-1 signaling can improve muscle regeneration. METHODS Muscle regeneration was induced by cardiotoxin injury, and we evaluated satellite cell activation and muscle maturation in HFD-fed mice. We also measured PIP(3) and the enzymes regulating its level, IRS-1-associated phosphatidylinositol 3-kinase (PI3K) and PTEN. Using primary cultures of muscle, we examined how fatty acids affect PTEN expression and how PTEN knockout influences muscle growth. Mice with muscle-specific PTEN knockout were used to examine how the HFD changes muscle regeneration. RESULTS The HFD raised circulating fatty acids and impaired the growth of regenerating myofibers while delaying myofiber maturation and increasing collagen deposition. These changes were independent of impaired proliferation of muscle progenitor or satellite cells but were principally related to increased expression of PTEN, which reduced PIP(3) in muscle. In cultured muscle cells, palmitate directly stimulated PTEN expression and reduced cell growth. Knocking out PTEN restored cell growth. In mice, muscle-specific PTEN knockout improved the defects in muscle repair induced by HFD. CONCLUSIONS Insulin resistance impairs muscle regeneration by preventing myofiber maturation. The mechanism involves fatty acid-stimulated PTEN expression, which lowers muscle PIP(3). If similar pathways occur in diabetic patients, therapeutic strategies directed at improving the repair of damaged muscle could include suppression of PTEN activity.