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Type 2 diabetes mellitus (T2DM) is a metabolic disorder that has reached epidemic proportions worldwide, posing a huge treat on people's health and quality of life. From a pathogenetic prospective, T2DM is driven by insulin resistance defined as a blunted response of tissues to insulin which leads to chronic hyperglycaemia. Mechanistically, lipotoxicity and particularly the intracellular accumulation of ceramides in the skeletal muscle and the liver, is a primary metabolic aberration underpinning insulin resistance. Indeed, intracellular ceramide accumulation can hamper insulin signal transduction pathway thereby promoting insulin resistance. This review will provide an updated overview of the metabolic defects underlaying ceramide buildup and the molecular mechanism by which ceramides imping upon insulin signalling. Additionally, the role of specific ceramide subspecies as potential biomarkers for T2DM and the role of both long- and medium-chain saturated fatty acids as a modulator of ceramide metabolism will be discussed.