Currently inherited or acquired skeletal muscle mitochondrial dysfunction is linked to dysregulated fatty acid metabolism, resulting in increased levels of intramyocellular lipids (IMCLs) and lipid intermediates, inducing insulin resistance. The present study aimed to clarify the order of changes in IMCL levels and skeletal muscle mitochondrial function during the development of type 2 diabetes in Zucker diabetic fatty (ZDF) rats. IMCL levels and skeletal muscle oxidative capacity were determined in vivo, using localized (1)H magnetic resonance spectroscopy (MRS) and dynamic (31)P MRS, respectively. In parallel, in vitro activities were measured from enzymes involved in fatty acid oxidation, the tricarboxylic acid cycle and the electron transport chain. Fa/fa ZDF rats were studied at 3 different ages corresponding to different stages of type 2 diabetes, whereas fa/+ rats served as controls. Fa/fa ZDF rats had higher IMCL contents than controls throughout the duration of the study. In vivo muscle oxidative capacity was not different in fa/fa animals compared to controls, and in vitro enzyme activity data suggested improved functionality of enzymes involved in fat oxidation in type 2 diabetic animals. Accordingly, we can conclude that in the ZDF rat model, type 2 diabetes develops in the absence of skeletal muscle mitochondrial dysfunction.