The effects of elevated plasma free fatty acid (FFA) levels on insulin-stimulated whole-body and skeletal muscle glucose transport, glucose uptake, glycolysis, and glycogen synthesis were studied in conscious rats during hyperinsulinemic-euglycemic clamps with (n = 26) or without (n = 23) Intralipid and heparin infusion. Whole-body and skeletal muscle glucose uptake, glycolysis, and glycogen synthesis were estimated using d-[3-³H]glucose and 2-[¹⁴C]deoxyglucose (study 1), and glucose transport activity was assessed by analyzing plasma kinetics of l-[¹⁴C]glucose and 3-O-[³H]-methylglucose (study 2). Plasma FFA levels decreased during the clamps without intralipid but increased above basal during the clamps with Intralipid infusion (P < 0.01 for both). Elevated plasma FFA levels decreased insulin-stimulated whole-body glucose uptake by ∼ 15% and ∼ 20% during physiological and maximal insulin clamps, respectively (P < 0.01). Similarly, insulin-stimulated glucose uptake was also decreased in individual skeletal muscles with Intralipid infusion (P < 0.05). The most profound effect of elevated plasma FFA levels was a 30–50% suppression of insulin-stimulated glycolysis in whole body and individual skeletal muscles in both clamps. In contrast, physiological insulin-stimulated glycogen synthesis was increased with elevated plasma FFA levels in whole body and individual skeletal muscles (P < 0.05). Glucose-6-phosphate (G-6-P) levels were increased in soleus and extensor digitorum longus (EDL) muscles with Intralipid infusion in both clamps (P < 0.05). Intralipid infusion did not alter the time profiles of plasma l-glucose and 3-O-methylglucose after an intravenous injection during maximal insulin clamps, and compartmental analysis indicated no significant effect of elevated FFA levels on glucose transport activity in insulin-sensitive tissues (P > 0.05). Thus, elevated plasma FFA decreased insulin-stimulated glucose uptake in skeletal muscle by suppressing glycolysis and increasing G-6-P levels. These findings suggest that the classic glucose-fatty acid cycle was the predominant mechanism underlying the inhibitory effect of FFA on skeletal muscle glucose uptake.