OBJECTIVE: We studied the relationship between % body fat (%BF), cardiovascular fitness (CVF), and insulin resistance (IR) in overweight middle-school children. STUDY DESIGN: Middle school children (n = 106, body mass index [BMI] > 95 th percentile for age) underwent evaluation of body composition, maximal volume of oxygen utilization (V o2) uptake/kg lean body mass (V o2max/kgLBM), and fasting glucose and insulin (FI) concentrations and derived homeostasis model assessment index (HOMAIR). RESULTS: Both %BF (r = .33, P < .001) and V o2max/kgLBM (r = −0.42, P < .0001) were significantly correlated with FI. Bivariate regression analysis revealed %BF (P = .008 vs FI, P = .035 vs HOMAIR) and VO2max/kgLBM (P < .001 vs FI, P = .009 vs HOMAIR) to be independent predictors of insulin sensitivity. In males, VO2max/kgLBM was a better predictor of FI and HOMAIR than %BF. CONCLUSIONS: In obese middle-school children, both %BF and VO2max/kgLBM are independent predictors of FI levels. The relationship between CVF and FI levels was significant in both sexes but was particularly profound and stronger than %BF in males. Efforts to reduce risk of type 2 diabetes mellitus in an increasingly obese child population should include exercise intervention sustained enough to improve CVF.