OBJECTIVE Little is known about the subcellular distribution of lipids in insulin-resistant skeletal muscle. However, it has recently been suggested that lipid accumulation in the subsarcolemmal region directly contributes to insulin resistance. Therefore we hypothesised that regional differences in lipid distribution in insulin-resistant muscle may be mediated by: (1) a reduction in fatty acid trafficking into mitochondria; and/or (2) a regional increase in the enzymes regulating lipid synthesis. METHODS Transmission electron microscopy was used to quantify lipid droplet and mitochondrial abundance in the subsarcolemmal and intermyofibrillar compartments in red and white muscles from lean and obese Zucker rats. To estimate rates of lipid trafficking into mitochondria, the metabolic fate of radiolabelled palmitate was determined. Key enzymes of triacylglycerol synthesis were also determined in each subcellular region. RESULTS Subsarcolemmal-compartmentalised lipids represented a small absolute fraction of the overall lipid content in muscle, as regardless of fibre composition (red/white) or phenotype (lean/obese), lipid droplets were more prevalent in the intermyofibrillar region, whereas insulin-resistant white muscles were devoid of subsarcolemmal-compartmentalised lipid droplets. While, in obese animals, lipid droplets accumulated in both subcellular regions, in red muscle of these animals lipids only appeared to be trafficked away from intermyofibrillar mitochondria, a process that cannot be explained by regional differences in the abundance of triacylglycerol esterification enzymes. CONCLUSIONS Lipid accumulation in the subsarcolemmal region is not necessary for insulin resistance. In the intermyofibrillar compartment, the diversion of lipids away from mitochondria in insulin-resistant animals probably contributes to lipid accumulation in this subcellular area.