Intramyocellular lipid (IMCL) has been associated with insulin resistance. However, an association between IMCL and insulin resistance might be modulated by oxidative capacity in skeletal muscle. We examined the hypothesis that 12 wk of exercise training would increase both IMCL and the oxidative capacity of skeletal muscle in older (67.3 +/- 0.7 yr), previously sedentary subjects (n = 13; 5 men and 8 women). Maximal aerobic capacity (Vo(2 max)) increased from 1.65 +/- 0.20 to 1.85 +/- 0.14 l/min (P < 0.05), and systemic fat oxidation induced by 1 h of cycle exercise at 45% of Vo(2 max) increased (P < 0.05) from 15.03 +/- 40 to 19.29 +/- 0.80 (micromol.min(-1).kg fat-free mass(-1)). IMCL, determined by quantitative histological staining in vastus lateralis biopsies, increased (P < 0.05) from 22.9 +/- 1.9 to 25.9 +/- 2.6 arbitrary units (AU). The oxidative capacity of muscle, determined by succinate dehydrogenase staining intensity, significantly increased (P < 0.05) from 75.2 +/- 5.2 to 83.9 +/- 3.6 AU. The percentage of type I fibers significantly increased (P < 0.05) from 35.4 +/- 2.1 to 40.1 +/- 2.3%. In conclusion, exercise training increases IMCL in older persons in parallel with an enhanced capacity for fat oxidation.