Abstract Insulin resistance, characterized by an inexorable decline in skeletal muscle glucose utilization and/or an excessive hepatic glucose production, constitutes a major pathogenic importance in a cluster of clinical disorders including diabetes mellitus, hypertension, dyslipidemia, central obesity and coronary artery disease. A novel concept suggests that heightened state of oxidative stress during diabetes contributes, at least in part, to the development of insulin resistance. Several key predictions of this premise were subjected to experimental testing using Goto–Kakizaki (GK) rats as a genetic animal model for non-obese type II diabetes. Euglycemic–hyperinsulinemic clamp studies with an insulin infusion index of 5 mU/kg bw/min were used to measure endogenous glucose production (EGP), glucose infusion rate (GIR), glucose disposal rate (GDR) and skeletal muscle glucose utilization index (GUI). Moreover, the status of oxidative stress as reflected by the urinary levels of isoprostane and protein carbonyl formation were also assessed as a function of diabetes. Post-absorptive basal EGP and circulating levels of insulin, glucose and free fatty acid (FFA) were elevated in GK rats, compared to their corresponding control values. In contrast, steady state GIR and GDR of the hyperglycemic/hyperinsulinemic animals were reduced, concomitantly with impaired insulin's ability to suppress EGP. Insulin stimulated [ 3H]-2-deoxyglucose (2-DG) uptake (a measure of glucose transport activity) by various types of skeletal muscle fibers both in vivo and in vitro (isolated muscle, cultured myoblasts) was diminished in diabetic GK rats. This diabetes-related suppression of skeletal muscle glucose utilization was associated with a decrease in insulin's ability to promote the phosphorylation of tyrosine residues of insulin receptor substrate-1 (IRS-1). Similarly, the translocation of GLUT-4 from intracellular compartment to plasma membrane in response to insulin was also reduced in these animals. Oxidative stress-based markers (e.g. urinary isoprostane, carbonyl-bound proteins) were elevated as a function of diabetes. Nullification of the heightened state of oxidative stress in the GK rats with α-lipoic acid resulted in a partial amelioration of the diabetes-related impairment of the in vivo and in vitro insulin actions. Collectively, the above data suggest that 1) insulin resistance in GK rats occurs at the hepatic and skeletal muscle levels, 2) muscle cell glucose transport exhibited a blunted response to insulin and it is associated with a major defect in key molecules of both GLUT-4 trafficking and insulin signaling pathways, 3) skeletal muscle insulin resistance in GK rats appears to be of genetic origin and not merely related to a paracrine or autocrine effect, since this phenomenon is also observed in cultured myoblasts over several passages and finally heightened state of oxidative stress may mediate the development of insulin resistance during diabetes.