There is extensive experimental evidence that sex steroids and insulin interact in their actions on tissues. At physiological levels, testosterone and oestradiol are thought to be involved in maintaining normal insulin sensitivity. However, outside this 'physiological window' these steroids may promote insulin resistance. Considerable research has been carried out on polycystic ovarian syndrome, a common disorder associated with excessive androgen production and insulin resistance. Hyperinsulinaemia in patients with this condition is believed to stimulate ovarian androgen production, and there is also evidence that androgens act directly on peripheral tissues to promote insulin resistance. There is the potential for a vicious circle to develop with increasing androgen production and insulin resistance. The molecular basis of this insulin resistance has been reported to involve reduced insulin receptor autophosphorylation, reduced expression and translocation of insulin-responsive glucose transporters and defects of the insulin signalling pathway distal to the insulin receptor. These defects await full characterization. Insulin-sensitizing agents can reverse many of the effects of insulin resistance and may have a future place in the treatment of polycystic ovarian syndrome and other conditions associated with steroid-induced insulin resistance. Recognition and treatment of sex steroid-associated insulin resistance at an early stage in patients may reduce their risk of developing Type II (non-insulin-dependent) diabetes mellitus, hypertension and dyslipidaemia, and so may improve fertility and reduce cardiovascular risk. Here we review the interplay between sex steroids and insulin resistance, and consider the implications this has for clinical conditions.