AIMS/HYPOTHESIS: Hepatic steatosis is strongly associated with hepatic and whole-body insulin resistance. It has proved difficult to determine whether hepatic steatosis itself is a direct cause of insulin resistance. In patients with familial hypobetalipoproteinaemia (FHBL), hepatic steatosis is a direct consequence of impaired hepatic VLDL excretion, independently of metabolic derangements. Thus, patients with FHBL provide a unique opportunity to investigate the relation between increased liver fat and insulin sensitivity. METHODS: We included seven male participants with FHBL and seven healthy matched controls. Intrahepatic triacylglycerol content and intramyocellular lipid content were measured using localised proton magnetic resonance spectroscopy ((1)H-MRS). A two-step hyperinsulinaemic-euglycaemic clamp, using stable isotopes, was assessed to determine hepatic and peripheral insulin sensitivity. RESULTS: (1)H-MRS showed moderate to severe hepatic steatosis in patients with FHBL. Basal endogenous glucose production (EGP) and glucose levels did not differ between the two groups, whereas insulin levels tended to be higher in patients compared with controls. Insulin-mediated suppression of EGP during lower dose insulin infusion and insulin-mediated peripheral glucose uptake during higher dose insulin infusion were comparable between FHBL participants and controls. Baseline fatty acids and lipolysis (glycerol turnover) at baseline and during the clamp did not differ between groups. CONCLUSIONS/INTERPRETATION: In spite of moderate to severe hepatic steatosis, people with FHBL do not display a reduction in hepatic or peripheral insulin sensitivity compared with healthy matched controls. These results indicate that hepatic steatosis per se is not a causal factor leading to insulin resistance. TRIAL REGISTRATION: ISRCTN35161775.