Insulin increases glucose uptake and metabolism in skeletal muscle by signal transduction via protein phosphorylation cascades. Insulin action on signal transduction is impaired in skeletal muscle from Type 2 diabetic subjects, underscoring the contribution of molecular defects to the insulin resistant phenotype. This review summarizes recent work to identify downstream intermediates in the insulin signaling pathways governing glucose homeostasis, in an attempt to characterize the molecular mechanism accounting for skeletal muscle insulin resistance in Type 2 diabetes. Furthermore, the effects of pharmaceutical treatment of Type 2 diabetic patients on insulin signaling and glucose uptake are discussed. The identification and characterization of pathways governing insulin action on glucose metabolism will facilitate the development of strategies to improve insulin sensitivity in an effort to prevent and treat Type 2 diabetes mellitus.