: Intramuscular lipid accumulation has been associated with insulin resistance (IR), aging, diabetes, dyslipidemia, and obesity. A substantial body of evidence has implicated ceramides, a sphingolipid intermediate, as potent antagonists of insulin action that drive insulin resistance. Indeed, genetic mouse studies that lower ceramides are potently insulin sensitizing. Surprisingly less is known about how physical activity (skeletal muscle contraction) regulates ceramides, especially in light that muscle contraction regulates insulin sensitivity. The purpose of this review is to critically evaluate studies (rodent and human) concerning the relationship between skeletal muscle ceramides and IR in response to increased physical activity. Our review of the literature indicates that chronic exercise reduces ceramide levels in individuals with obesity, diabetes, or hyperlipidemia. However, metabolically healthy individuals engaged in increased physical activity can improve insulin sensitivity independent of changes in skeletal muscle ceramide content. Herein we discuss these studies and provide context regarding the technical limitations (e.g., difficulty assessing the myriad ceramide species, the challenge of obtaining information on subcellular compartmentalization, and the paucity of flux measurements) and a lack of mechanistic studies that prevent a more sophisticated assessment of the ceramide pathway during increased contractile activity that lead to divergences in skeletal muscle insulin sensitivity.