Insulin resistance in skeletal muscle is one of the earliest symptoms associated with non-insulin-dependent diabetes mellitus (NIDDM). Tumour necrosis factor (TNF) and nonesterified fatty acids have been proposed to be crucial factors in the development of the insulin-resistant state. We here show that, although TNF downregulated insulin-induced insulin receptor (IR) and IR substrate (IRS)-1 phosphorylation as well as phosphoinositide 3-kinase (PI3-kinase) activity in pmi28 myotubes, this was, unlike in adipocytes, not sufficient to affect insulin-induced glucose transport. Rather, TNF increased membrane expression of GLUT1 and glucose transport in these muscle cells. In contrast, the nonesterified fatty acid palmitate inhibited insulin-induced signalling cascades not only at the level of IR and IRS-1 phosphorylation, but also at the level protein kinase B (PKB/Akt), which is thought to be directly involved in the insulin-induced translocation of GLUT4, and inhibited insulin-induced glucose uptake. Palmitate also abrogated TNF-dependent enhancement of basal glucose uptake, suggesting that palmitate has the capacity to render muscle cells resistant not only to insulin but also to TNF with respect to glucose transport by GLUT4 and GLUT1, respectively. Our data illustrate the complexity of the mechanisms governing insulin resistance of skeletal muscle, questioning the role of TNF as a direct inhibitor of glucose homoeostasis in this tissue and shedding new light on an as yet unrecognized multifunctional role for the predominant nonesterified fatty acid palmitate in this process.