Adipose triglyceride lipase (ATGL) is important for triglyceride (TG) metabolism in adipose tissue, and ATGL null mice show increased adiposity. Given the apparent importance of ATGL in TG metabolism and the association of lipid deposition with insulin resistance, we examined the role of ATGL in regulating skeletal muscle lipid metabolism and insulin-stimulated glucose disposal. ATGL expression in myotubes was reduced by siRNA and increased with a retrovirus encoding GFP-HA-ATGL. ATGL was also overexpressed in rats by in vivo electrotransfer. ATGL was down-regulated in skeletal muscle of obese, insulin-resistant mice and negatively correlated with intramuscular TG levels. ATGL siRNA in myotubes reduced TG hydrolase activity and increased TG content whereas ATGL overexpression induced the reciprocal response, indicating that ATGL is an essential TG lipase in skeletal muscle. ATGL overexpression in myotubes increased the oxidation of fatty acid (FA) liberated from TG, and diglyceride and ceramide contents. These responses in cells were largely recapitulated in rats overexpressing ATGL. When ATGL protein expression and TG hydrolase activity in obese, insulin-resistant rats were restored to levels observed in lean rats, TG content was reduced; however, the insulin resistance induced by the high fat diet persisted. In conclusion, ATGL TG hydrolysis in skeletal muscle is a critical determinant of lipid metabolism and storage. While ATGL content and TG hydrolase activity are decreased in obese, insulin-resistant phenotypes, overexpression does not rescue the condition, indicating that reduced ATGL is unlikely to be a primary cause of obesity-associated insulin resistance.