A substantial number of people at risk of developing type 2 diabetes could not improve insulin sensitivity by physical training intervention. We studied the mechanisms of this impaired exercise response in 20 middle-aged individuals at high risk of developing type 2 diabetes who performed 8 weeks of controlled cycling and walking training at 80% individual Vo2 peak. Participants identified as nonresponders in insulin sensitivity (based on the Matsuda index) did not differ in preintervention parameters compared with high responders. The failure to increase insulin sensitivity after training correlates with impaired upregulation of mitochondrial fuel oxidation genes in skeletal muscle, and with the suppression of the upstream regulators PGC1α and AMPKα2. The muscle transcriptomes of the nonresponders are further characterized by the activation of transforming growth factor (TGF)-β and TGF-β target genes, which is associated with increases in inflammatory and macrophage markers. TGF-β1 as inhibitor of mitochondrial regulators and insulin signaling is validated in human skeletal muscle cells. Activated TGF-β1 signaling downregulates the abundance of PGC1α, AMPKα2, the mitochondrial transcription factor TFAM, and mitochondrial enzymes. Thus, the data suggest that increased TGF-β activity in skeletal muscle can attenuate the improvement of mitochondrial fuel oxidation after training and contribute to the failure to increase insulin sensitivity.