Triglyceride accumulation in skeletal muscle contributes to insulin resistance in obesity. We recently showed that alpha-lipoic acid (ALA) reduces body weight and prevents the development of diabetes in diabetes-prone obese rats by reducing triglyceride accumulation in non-adipose tissues. AMP-activated protein kinase (AMPK) is a major regulator of cellular energy metabolism. We examined whether ALA lowers triglyceride accumulation in skeletal muscle by activating AMPK. Alpha2-AMPK activity was decreased in obese rats compared to control rats. Administration of ALA to obese rats increased insulin-stimulated glucose disposal in whole body and in skeletal muscle. ALA also increased fatty acid oxidation and activated AMPK in skeletal muscle. Adenovirus-mediated administration of dominant negative AMPK into skeletal muscle prevented the ALA-induced increases in fatty acid oxidation and insulin-stimulated glucose uptake. These results suggest that ALA-induced improvement of insulin sensitivity is mediated by activation of AMPK and reduced triglyceride accumulation in skeletal muscle.