In adipose tissue, the primary physiological function of insulin is the suppression of lipolysis, the hydrolysis of stored fat. Mechanistically, insulin suppresses lipolysis both in transcriptional and post-transcriptional levels. Insulin signaling acutely inhibits beta-adrenergic signaling by decreasing intracellular cyclic AMP levels and the rate of lipolysis. Insulin also suppresses lipolysis by down-regulating the expression of the rate-limiting lipolytic enzyme, adipose triglyceride lipase or ATGL. In insulin resistance and type 2 diabetes, insulin mediated attenuation of lipolysis is impaired leading to an increased rate of lipolysis and increased release of free fatty acids (FFA) in the circulation. This is one of the potential mechanisms behind the development of hyperlipidemia and subsequent metabolic abnormalities in type 2 diabetes. In this article, we focus on the recent findings that highlight distinct molecular mechanisms by which insulin action is mediated and possible implications of the deregulation of these pathways in the pathophysiological context.