Elevated saturated FFAs including palmitate (C16:0) are a primary trigger for peripheral insulin resistance characterized by impaired glucose uptake/disposal in skeletal muscle, resulting from impaired GLUT4 translocation in response to insulin. We herein demonstrate that palmitate induces down-regulation of sortilin, a sorting receptor implicated in the formation of insulin-responsive GLUT4 vesicles, via mechanisms involving PKCθ and TNF-α-converting enzyme, but not p38, JNK, or mitochondrial reactive oxygen species generation, leading to impaired GLUT4 trafficking in C2C12 myotubes. Intriguingly, unsaturated FFAs such as palmitoleate (C16:1) and oleate (C18:1) had no such detrimental effects, appearing instead to effectively reverse palmitate-induced impairment of insulin-responsive GLUT4 recycling along with restoration of sortilin abundance by preventing aberrant PKCθ activation. On the other hand, shRNA-mediated reduction of sortilin in intact C2C12 myotubes inhibited insulin-induced GLUT4 recycling without dampening Akt phosphorylation. We found that the peroxisome proliferator-activated receptor γ agonist troglitazone prevented the palmitate-induced sortilin reduction and also ameliorated insulin-responsive GLUT4 recycling without altering the palmitate-evoked insults on signaling cascades; neither highly phosphorylated PKCθ states nor impaired insulin-responsive Akt phosphorylation was affected. Taken together, our data provide novel insights into the pathogenesis of PKCθ-dependent insulin resistance with respect to insulin-responsive GLUT4 translocation, which could occur not only through defects of insulin signaling but also via a reduction of sortilin, which directly controls trafficking/sorting of GLUT4 in skeletal muscle cells. In addition, our data suggest the insulin-sensitizing action of peroxisome proliferator-activated receptor γ agonists to be at least partially mediated through the restoration of proper GLUT4 trafficking/sorting events governed by sortilin.