Aims/hypothesis. The amount and quality of fat in the diet could be of importance for development of insulin resistance and related metabolic disorders. Our aim was to determine whether a change in dietary fat quality alone could alter insulin action in humans. Methods. The KANWU study included 162 healthy subjects chosen at random to receive a controlled, isoenergetic diet for 3 months containing either a high proportion of saturated (SAFA diet) or monounsaturated (MUFA diet) fatty acids. Within each group there was a second assignment at random to supplements with fish oil (3.6 g n-3 fatty acids/d) or placebo. Results. Insulin sensitivity was significantly impaired on the saturated fatty acid diet (-10 %, p = 0.03) but did not change on the monounsaturated fatty acid diet ( + 2 %, NS) (p = 0.05 for difference between diets). Insulin secretion was not affected. The addition of n-3 fatty acids influenced neither insulin sensitivity nor insulin secretion. The favourable effects of substituting a monounsaturated fatty acid diet for a saturated fatty acid diet on insulin sensitivity were only seen at a total fat intake below median (37E %). Here, insulin sensitivity was 12.5 % lower and 8.8 % higher on the saturated fatty acid diet and monounsaturated fatty acid diet respectively (p = 0.03). Low density lipoprotein cholesterol (LDL) increased on the saturated fatty acid diet ( + 4.1 %, p < 0.01) but decreased on the monounsaturated fatty acid diet (MUFA) (–5.2, p < 0.001), whereas lipoprotein (a) [Lp(a)] increased on a monounsaturated fatty acid diet by 12 % (p < 0.001). Conclusions/interpretation. A change of the proportions of dietary fatty acids, decreasing saturated fatty acid and increasing monounsaturated fatty acid, improves insulin sensitivity but has no effect on insulin secretion. A beneficial impact of the fat quality on insulin sensitivity is not seen in individuals with a high fat intake ( > 37E %). [Diabetologia (2001) 44: 312–319]