Aims/hypothesis: Diminished cortical filamentous actin (F-actin) has been implicated in skeletal muscle insulin resistance, yet the mechanism(s) is unknown. Here we tested the hypothesis that changes in membrane cholesterol could be a causative factor, as organised F-actin structure emanates from cholesterol-enriched raft microdomains at the plasma membrane. Methods: Skeletal muscle samples from high-fat-fed animals and insulin-sensitive and insulin-resistant human participants were evaluated. The study also used L6 myotubes to directly determine the impact of fatty acids (FAs) on membrane/cytoskeletal variables and insulin action. Results: High-fat-fed insulin-resistant animals displayed elevated levels of membrane cholesterol and reduced F-actin structure compared with normal chow-fed animals. Moreover, human muscle biopsies revealed an inverse correlation between membrane cholesterol and whole-body glucose disposal. Palmitate-induced insulin-resistant myotubes displayed membrane cholesterol accrual and F-actin loss. Cholesterol lowering protected against the palmitate-induced defects, whereas characteristically measured defects in insulin signalling were not corrected. Conversely, cholesterol loading of L6 myotube membranes provoked a palmitate-like cytoskeletal/GLUT4 derangement. Mechanistically, we observed a palmitate-induced increase in O-linked glycosylation, an end-product of the hexosamine biosynthesis pathway (HBP). Consistent with HBP activity affecting the transcription of various genes, we observed an increase in Hmgcr, a gene that encodes 3-hydroxy-3-methyl-glutaryl coenzyme A reductase, the rate-limiting enzyme in cholesterol synthesis. In line with increased HBP activity transcriptionally provoking a membrane cholesterol-based insulin-resistant state, HBP inhibition attenuated Hmgcr expression and prevented membrane cholesterol accrual, F-actin loss and GLUT4/glucose transport dysfunction. Conclusions/interpretation: Our results suggest a novel cholesterolgenic-based mechanism of FA-induced membrane/cytoskeletal disorder and insulin resistance. © 2011 The Author(s).