ZnT7 (Slc30a7) is a widely expressed zinc transporter involved in sequestration of zinc into the Golgi apparatus and vesicular compartments. znt7-knockout (KO) mice are mildly zinc-deficient and lean. Despite their lean phenotype, adult male znt7-KO mice are prone to insulin resistance. We hypothesized that fat partitioning from adipose to nonadipose tissues causes insulin resistance in znt7-KO mice. Here, we used biological and biochemical methods, including fatty acid and oxylipin profiling, EM, immunohistochemistry, quantitative RT-PCR, and Western blot analysis, to identify the underlying mechanism of insulin resistance in znt7-KO mice. We found that insulin resistance in this model was primarily associated with increased intracellular fatty acid levels in the skeletal muscle, which promoted intracellular lipid accumulation and production of bioactive lipid mediators, such as 12,13-dihydroxyoctadecanoic acid (12,13-DiHOME) and 12-hydroxyeicosatetraenoic acid (12-HETE). The expression of fatty acid-binding protein 3 (Fabp3) was dramatically up-regulated in the znt7-KO muscle cells accompanied by increased expression of Cd36, Slc27a1, and Slc27a4, the three major fatty acid transporters in the skeletal muscle. We also demonstrated that znt7-KO muscle cells had increased fatty acid oxidative capacity, indicated by enlarged mitochondria and increased mRNA or protein expression of key enzymes involved in the fatty acid mitochondrial shuttle and β-oxidation. We conclude that increased fatty acid uptake in the znt7-KO skeletal muscle is a key factor that contributes to the excessive intracellular lipid deposit and elevated production of bioactive lipid mediators. These mediators may play pivotal roles in oxidative stress and inflammation, leading to insulin resistance.