Hepatic lipid accumulation may be a result of one or several of the following factors: increased delivery of adipose tissue or dietary fatty acids to the liver, increased de novo synthesis of fatty acids in the liver, decreased rate of hepatic fatty-acid oxidation, or decreased rate in the exit of fatty acids from the liver in the form of triglycerides. Delivery of fatty acids to the liver appears to be the most potent mechanism for hepatic lipid accumulation. Hepatic lipid accumulation is linked to the development of hepatic insulin resistance, which is demonstrated by the impaired suppression of hepatic glucose output by insulin. Current evidence suggests that defects associated with the molecular mechanisms responsible for the propagation of the insulin signal in the liver cells are responsible for the impaired insulin effect and that these defects can develop secondary to lipid accumulation in the liver. Hepatic lipid accumulation appears to affect the activity of phosphatidylinositol 3-kinase, which has a central role in mediating the insulin action in hepatocytes. Generally, exercise has been shown to enhance the insulin action in the liver. Although an exercise-related mechanistic link between attenuation in hepatic lipid accumulation and enhancement in insulin action in the liver has not been described yet, the benefits of exercise on hepatic insulin action may relate to the potential effects of exercise on regulating/preventing hepatic lipid accumulation. However, direct effects of exercise on insulin action in the liver, independent of any effects on hepatic lipid metabolism, cannot currently be excluded. Further research is needed to evaluate the relative importance of exercise in the treatment of hepatic insulin resistance, specifically as it relates to lipid accumulation in the liver.