We explored the role of reactive oxygen species (ROS) in the pathogenesis of muscle insulin resistance. We assessed insulin action in vivo with a hyperinsulinemic-euglycemic clamp in mice expressing a mitochondrial-targeted catalase (MCAT) that were fed regular chow (RC) or a high-fat diet (HFD) or underwent an acute infusion of a lipid emulsion. RC-fed MCAT mice were similar to littermate wild-type (WT) mice. However, HFD-fed MCAT mice were protected from diet-induced insulin resistance. In contrast, an acute lipid infusion caused muscle insulin resistance in both MCAT and WT mice. ROS production was decreased in both HFD-fed and lipid-infused MCAT mice and cannot explain the divergent response in insulin action. MCAT mice had subtly increased energy expenditure and muscle fat oxidation with decreased intramuscular diacylglycerol (DAG) accumulation, protein kinase C-θ (PKCθ) activation, and impaired insulin signaling with HFD. In contrast, the insulin resistance with the acute lipid infusion was associated with increased muscle DAG content in both WT and MCAT mice. These studies suggest that altering muscle mitochondrial ROS production does not directly alter the development of lipid-induced insulin resistance. However, the altered energy balance in HFD-fed MCAT mice protected them from DAG accumulation, PKCθ activation, and impaired muscle insulin signaling.