The insulin-responsive glucose transporter 4 (GLUT4) has a major role in glucose uptake and metabolism in insulin target tissues (i.e. adipose and muscle cells). In these tissues, the peroxisome proliferator-activated receptor (PPAR) family of nuclear receptors and the winged-helix-forkhead box class O (FOXO) family of factors are two key families of transcription factors that regulate glucose homeostasis and insulin responsiveness. Type 2 diabetes mellitus and obesity are associated with impaired regulation of GLUT4 gene expression and elevated levels of free fatty acids and proinflammatory factors. Based on our studies of the interplay between PPAR-gamma, FOXO1 and free fatty acids, and inflammation in regulating GLUT4 transcription in sickness and in health, we suggest a novel paradigm to increase insulin sensitivity in bona fide insulin target cells.