Dietary fatty acids play an important role in the development of insulin resistance, the prelude to type 2 diabetes mellitus. This review addresses the potential role of olive oil-derived MUFA in insulin sensitivity, particularly how dietary fat interacts with insulin resistance looking at whole body metabolic measures, as well as molecular effects. The review focuses on the role of non-esterified fatty acids, fatty acid composition in vivo and dietary fat modification on insulin resistance in the metabolic syndrome. Particular emphasis is placed on the role of olive oil within the context of dietary modification to improve insulin sensitivity and for the prevention of the metabolic syndrome.