FTY720 is a sphingosine-1-phosphate analog that has been shown to inhibit ceramide synthesis in vitro. Because ceramide accumulation in muscle is associated with insulin resistance, we aimed to examine whether FTY720 would prevent muscle ceramide accumulation in high fat-fed mice and subsequently improve glucose homeostasis. Male C57Bl/6 mice were fed either a chow or high fat-diet (HFD) for 6 wk, after which they were treated with vehicle or FTY720 (5 mg/kg) daily for a further 6 wk. The ceramide content of muscle was examined and insulin action was assessed. Whereas the HFD increased muscle ceramide, this was prevented by FTY720 treatment. This was not associated with alterations in the expression of genes involved in sphingolipid metabolism. Interestingly, the effects of FTY720 on lipid metabolism were not limited to ceramide because FTY720 also prevented the HFD-induced increase in diacylglycerol and triacylglycerol in muscle. Furthermore, the increase in CD36 mRNA expression induced by fat feeding was prevented in muscle of FTY720-treated mice. This was associated with an attenuation of the HFD-induced increase in palmitate uptake and esterification. In addition, FTY720 improved glucose homeostasis as demonstrated by a reduction in plasma insulin, an improvement in whole-body glucose tolerance, an increase in insulin-stimulated glucose uptake, and Akt phosphorylation in muscle. In conclusion, FTY720 exerts beneficial effects on muscle lipid metabolism that prevent lipid accumulation and improve glucose tolerance in high fat-fed mice. Thus, FTY720 and other compounds that target sphingosine-1-phosphate signaling may have therapeutic potential in treating insulin resistance.