Insulin is released by beta cells in the Pancreas, and functions to decrease the amount of sugar in your blood by causing that sugar to be taken up primarily into muscle cells and stored as glycogen for later use. When more insulin is needed to maintain normal amounts of glucose in your blood, it is referred to as insulin resistance. Insulin resistance in the muscles is influenced by free-fatty acids in your blood, in addition to factors released by fat cells such as Leptin, both of which are high in obese individuals. It is actually fat that accumulates inside muscle cells (and fatty byproducts) that block the insulin driven transport of glucose into them. If glucose can’t come into the cell when insulin is present (insulin resistance), then the levels of glucose in the blood remain high after a meal.
High levels of fat in the blood is also associated with decreased secretion of Insulin from the beta cells in the Pancreas. The specific mechanism connecting insulin secretion to fat was identified in mice with a genetic alteration in a glucose transporter that releases Insulin in response to glucose in the blood. Similar changes to this transporter could be induced in normal mice fed a high-fat diet, supporting earlier evidence from the 1930’s associating high fat diets with insulin resistance. Overtime, fat and their break down products lead to beta cell death, and by the time a person is diagnosed with Diabetes, about half of their original beta cells are gone.
This is of course a simplified explanation, but for the most part it is fat, especially saturated fat consumed in our diet that leads to insulin resistance, decreased insulin secretion, and eventually beta cell death. Other important missteps occur as part of this process, such as increased insulin resistance and accumulation of fat in liver cells. The point is, despite most people thinking that Diabetes is caused by eating too much sugar, and genetics, the most current scientific evidence suggests fat is the strongest causative factor also explaining the link to obesity.
Here is a great video from Nutritionfacts.org reviewing this process in slightly more detail: https://nutritionfacts.org/video/what-causes-diabetes/
Here is a diagram with some additional detail as well:
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