Type 2 diabetes is characterized by the presence of hyperlipidemia, hyperinsulinemia and insulin resistance. The aim of this study was to investigate whether acute hyperlipidemia-induced insulin resistance in the presence of hyperinsulinemia was due to defective insulin signaling. Hyperinsulinemia (~300mU•l^-1) with either hyperlipidemia or glycerol (control) were produced in cannulated male Wistar rats for either 30min, 1h, 3h or 5h. The glucose infusion rate required to maintain euglycemia was significantly reduced by 3h with lipid infusion and further reduced after 5h of infusion without any difference in plasma insulin levels, indicating the development of insulin resistance. Consistent with this, in vivo skeletal muscle glucose uptake (31%, P < 0.05) and glycogen synthesis rate (38%, P < 0.02) were significantly reduced after 5h compared to 3h of lipid infusion. Despite the development of insulin resistance, there was no difference in the phosphorylation state of multiple insulin signaling intermediates, or muscle diacylglyceride and ceramide content over the same time course. However, there was an increase in cumulative exposure to long chain acyl-CoA (43%) with lipid infusion. Interestingly, muscle pyruvate dehydrogenase kinase 4 protein content was decreased in hyperinsulinemic glycerol infused rats and this decrease was blunted in muscle from hyperinsulinemic lipid infused rats. Decreased pyruvate dehydrogenase complex activity was also observed in lipid and insulin infused animals. Overall, these results suggest that acute reductions in muscle glucose metabolism in rats with hyperlipidemia and hyperinsulinemia are more likely due to substrate competition than a significant early defect in insulin action or signaling.