Upon their discovery almost 40 years ago, isoforms of the lipid-activated protein kinase C (PKC) family were initially regarded only as downstream effectors of the second messengers calcium and diacylglycerol, undergoing activation upon phospholipid hydrolysis in response to acute stimuli. Subsequently, several isoforms were found to be associated with the inhibitory effects of lipid over-supply on glucose homeostasis, especially the negative cross-talk with insulin signal transduction, observed upon accumulation of diacylglycerol in insulin target tissues. The PKC family has therefore attracted much attention in diabetes and obesity research, because intracellular lipid accumulation is strongly correlated with defective insulin action and the development of type 2 diabetes. Causal roles for various isoforms in the generation of insulin resistance have more recently been confirmed using PKC-deficient mice. However, during characterization of these animals, it became increasingly evident that the enzymes play key roles in the modulation of lipid metabolism itself, and may control the supply of lipids between tissues such as adipose and liver. Molecular studies have also demonstrated roles for PKC isoforms in several aspects of lipid metabolism, such as adipocyte differentiation and hepatic lipogenesis. While the precise mechanisms involved, especially the identities of protein substrates, are still unclear, the emerging picture suggests that the currently held view of the contribution of PKC isoforms to metabolism is an over-simplification. Although PKCs may inhibit insulin signal transduction, these enzymes are not merely downstream effectors of lipid accumulation, but in fact control the fate of fatty acids, thus the tail wags the dog.