This article addresses the role of insulin resistance in the pathogenesis of type 2 diabetes. The major causes of acquired insulin resistance including aging, pregnancy, lack of physical activity, and obesity are discussed briefly. The role of free fatty acids (FFAs) as a link between obesity and insulin resistance/type 2 diabetes is discussed in detail. Evidence is provided showing that increased plasma FFA levels produce insulin resistance dosage dependently, acutely, and chronically. Mechanisms by which FFA can cause insulin resistance are outlined. Lastly, normalizing plasma FFA levels is proposed as a new approach to reducing insulin resistance and the risk for type 2 diabetes mellitus, and atherosclerotic vascular disease.