Nonalcoholic fatty liver disease (NAFLD) is the most frequent chronic liver disease in the United States and is strongly associated with hepatic insulin resistance. We examined whether the thyroid hormone receptor-α (Thra) would be a potential therapeutic target to prevent diet-induced NAFLD and insulin resistance. For that purpose, we assessed insulin action in high-fat diet-fed Thra gene knockout (Thra-0/0) and wild-type mice using hyperinsulinemic-euglycemic clamps combined with (3)H/(14)C-labeled glucose to assess basal and insulin-stimulated rates of glucose and fat metabolism. Body composition was assessed by (1)H magnetic resonance spectroscopy and energy expenditure by indirect calorimetry. Relative rates of hepatic glucose and fat oxidation were assessed in vivo using a novel proton-observed carbon-edited nuclear magnetic resonance technique. Thra-0/0 were lighter, leaner, and manifested greater whole-body insulin sensitivity than wild-type mice during the clamp, which could be attributed to increased insulin sensitivity both in liver and peripheral tissues. Increased hepatic insulin sensitivity could be attributed to decreased hepatic diacylglycerol content, resulting in decreased activation of protein kinase Cε and increased insulin signaling. In conclusion, loss of Thra protects mice from high-fat diet-induced hepatic steatosis and hepatic and peripheral insulin resistance. Therefore, thyroid receptor-α inhibition represents a novel pharmacologic target for the treatment of NAFLD, obesity, and type 2 diabetes.