Mitochondrial function has been examined in insulin-resistant (IR) states including type 2 diabetes mellitus (T2DM). Previous studies using phosphorus-31 magnetic resonance spectroscopy (P-MRS) in T2DM reported results as relative concentrations of metabolite ratios, which could obscure differences in phosphocreatine ([PCr]) and adenosine triphosphate concentrations ([ATP]) between T2DM and normal glucose tolerance (NGT) individuals. We used an image-guided P-MRS method to quantitate [PCr], inorganic phosphate [Pi], phosphodiester [PDE], and [ATP] in vastus lateralis (VL) muscle in 11 T2DM and 14 NGT subjects. Subjects also received oral glucose tolerance test, euglycemic insulin clamp, H-MRS to measure intramyocellular lipids [IMCL], and VL muscle biopsy to evaluate mitochondrial density. T2DM subjects had lower absolute [PCr] and [ATP] than NGT subjects (PCr 28.6 ± 3.2 vs. 24.6 ± 2.4, P< 0.002, and ATP 7.18 ± 0.6 vs. 6.37 ± 1.1, P < 0.02) while [PDE] was higher, but not significantly. [PCr], obtained using the traditional ratio method, showed no significant difference between groups. [PCr] was negatively correlated with HbA1c ( r = -0.63, P < 0.01) and fasting plasma glucose ( r = -0.51, P = 0.01). [PDE] was negatively correlated with Matsuda index ( r = -0.43, P = 0.03) and M/I ( r = -0.46, P = 0.04), but was positively correlated with [IMCL] ( r = 0.64, P < 0.005), HbA1c, and FPG ( r = 0.60, P = 0.001). To summarize, using a modified, in vivo quantitative P-MRS method, skeletal muscle [PCr] and [ATP] are reduced in T2DM, while this difference was not observed with the traditional ratio method. The strong inverse correlation between [PCr] vs. HbA1c, FPG, and insulin sensitivity supports the concept that lower baseline skeletal muscle [PCr] is related to key determinants of glucose homeostasis.