Skeletal muscle plays a major role in insulin-stimulated glucose disposal. This paper reviews the range of evidence in humans and experimental animals demonstrating close associations between insulin action and two major aspects of muscle morphology: fatty acid composition of the major structural lipid (phospholipid) in muscle cell membranes and relative proportions of major muscle fiber types. Work in vitro and in vivo in both rats and humans has shown that incorporation of more unsaturated fatty acids into muscle membrane phospholipid is associated with improved insulin action. As the corollary, a higher proportion of saturated fats is linked to impairment of insulin action (insulin resistance). Studies in vitro suggest a causal relationship. Among polyunsaturated fatty acids (PUFA) there is some, but not conclusive, evidence that omega-3 (n-3) PUFA may play a particular role in improving insulin action; certainly a high n-6/n-3 ratio appears deleterious. In relation to fiber type, the more highly oxidative, insulin-sensitive type 1 and type 2a fibers have a higher percentage of unsaturated fatty acids, particularly n-3, in their membrane phospholipid, compared to the insulin-resistant, glycolytic, type 2b fibers. These variables, however, can be separated and may act in synergy to modulate insulin action. It remains to establish whether lifestyle (e.g., dietary fatty acid profile and physical activity), genetic predisposition, or a combination are the prime determinants of muscle morphology (particularly membrane lipid profile) and hence insulin action.