Intramyocellular lipid (IMCL) has been inversely associated with insulin sensitivity in some, but not all, studies. This study utilized fast, high-resolution, magnetic resonance spectroscopic imaging (MRSI) to: investigate relationships between muscle lipids (IMCL and extramyocellular lipid (EMCL)) and insulin sensitivity in muscles of varying oxidative capacity, explore ethnic differences in these relationships, and determine whether a eucaloric, low-fat dietary intervention would reduce IMCL and increase insulin sensitivity. Subjects were 30 healthy, African-American (AA; n=14) and European-American (EA; n=16) males, BMI 26.49 (±5.57) kg/m(2), age 21.80 (±7.84) yrs. Soleus and tibialis anterior muscle lipids were quantified using MRSI. Insulin sensitivity was assessed via intravenous glucose tolerance test. A 2-week, eucaloric, low-fat diet intervention was conducted in a sub-group (n=12) subjects with assessments at baseline and post-intervention. Neither IMCL nor EMCL levels differed between ethnicities. In the total group, and within EA (but not AA), both tibialis anterior IMCL and EMCL were inversely associated with insulin sensitivity (P<0.05 for both); soleus muscle lipids were not associated with insulin sensitivity. Soleus, but not tibialis anterior, IMCL declined in both ethnic groups (average 25.3%; p<0.01) following dietary intervention; insulin sensitivity was unchanged. Results suggest that an association of muscle lipids with insulin sensitivity may be influenced by the oxidative capacity of the muscle group studied and may vary with ethnicity.