Objective: To determine insulin sensitivity and skeletal muscle fatty acid (FA) handling at baseline and after a high-fat mixed meal in impaired fasting glucose (IFG), impaired glucose tolerance (IGT), IFG/IGT and normal glucose tolerance (NGT) subjects. Design: In this multi-center study, insulin sensitivity and b-cell function were assessed (n ¼ 102), using a euglycemichyperinsulinemic and hyperglycemic clamp with additional arginine stimulation and a 75 g oral glucose tolerance test. Fasting and postprandial skeletal muscle FA handling was examined in a substudy using the forearm balance technique (n ¼ 35). Subjects: A total of 102 subjects with IFG (n ¼ 48), IGT (n ¼ 12), IFG/IGT (n ¼ 26) and NGT (n ¼ 16). Results: IFG, IGT and IFG/IGT subjects had lower insulin sensitivity with no differences between groups, and lower impaired b-cell function compared with NGT controls. The early postprandial increase in triacylglycerol (TAG) concentration was higher (iAUC 0À2 h IFG: 238.4 ± 26.5, IGT: 234.0 ± 41.0 and NGT: 82.6 ± 13.8 mmol l À1 min À1 , both Po0.05) and early TAG extraction was increased (AUC 0À2 h IFG: 56.8±9.0, IGT: 52.2±12.0 and NGT: 3.8±15.4 nmol Á 100 ml À1 min À1 , Po0.05 and P ¼ 0.057, respectively) in both IFG and IGT subjects. Conclusion: IFG, IGT and IFG/IGT subjects have lower insulin sensitivity and impaired b-cell function compared with age-and BMI-matched NGT controls. The increased postprandial TAG response and higher muscle TAG extraction in both IFG and IGT compared with NGT may lead to ectopic fat accumulation in the skeletal muscle, thereby contributing to insulin resistance.