Both pharmacological intervention (i.e., thiazolidinediones [TZDs]) and lifestyle modification (i.e., exercise training) are clinically effective treatments for improving whole-body insulin sensitivity. However, the mechanism(s) by which these therapies reverse lipid-induced insulin resistance in skeletal muscle is unclear. We determined the effects of 4 weeks of rosiglitazone treatment and exercise training and their combined actions (rosiglitazone treatment and exercise training) on lipid and glucose metabolism in high-fat-fed rats. High-fat feeding resulted in decreased muscle insulin sensitivity, which was associated with increased rates of palmitate uptake and the accumulation of the fatty acid metabolites ceramide and diacylglycerol. Impairments in lipid metabolism were accompanied by defects in the Akt/AS160 signaling pathway. Exercise training, but not rosiglitazone treatment, reversed these impairments, resulting in improved insulin-stimulated glucose transport and increased rates of fatty acid oxidation in skeletal muscle. The improvements to glucose and lipid metabolism observed with exercise training were associated with increased AMP-activated protein kinase α1 activity; increased expression of Akt1, peroxisome proliferator-activated receptor γ coactivator 1, and GLUT4; and a decrease in AS160 expression. In contrast, rosiglitazone treatment exacerbated lipid accumulation and decreased insulin-stimulated glucose transport in skeletal muscle. However, rosiglitazone, but not exercise training, increased adipose tissue GLUT4 and acetyl CoA carboxylase expression. Both exercise training and rosiglitazone decreased liver triacylglycerol content. Although both interventions can improve whole-body insulin sensitivity, our results show that they produce divergent effects on protein expression and triglyceride storage in different tissues. Accordingly, exercise training and rosiglitazone may act as complementary therapies for the treatment of insulin resistance.