Despite opposing insulin sensitivity and cardiometabolic risk, both athletes and patients with type 2 diabetes have increased skeletal myocyte fat storage: the so-called "athlete's paradox". In a parallel non-randomised, non-blinded trial (NCT03065140), we characterised and compared the skeletal myocyte lipid signature of 29 male endurance athletes and 30 patients with diabetes after undergoing deconditioning or endurance training respectively. The primary outcomes were to assess intramyocellular lipid storage of the vastus lateralis in both cohorts and the secondary outcomes were to examine saturated and unsaturated intramyocellular lipid pool turnover. We show that athletes have higher intramyocellular fat saturation with very high palmitate kinetics, which is attenuated by deconditioning. In contrast, type 2 diabetes patients have higher unsaturated intramyocellular fat and blunted palmitate and linoleate kinetics but after endurance training, all were realigned with those of deconditioned athletes. Improved basal insulin sensitivity was further associated with better serum cholesterol/triglycerides, glycaemic control, physical performance, enhanced post insulin receptor pathway signalling and metabolic sensing. We conclude that insulin-resistant, maladapted intramyocellular lipid storage and turnover in patients with type 2 diabetes show reversibility after endurance training through increased contributions of the saturated intramyocellular fatty acid pools. Clinical Trial Registration: NCT03065140: Muscle Fat Compartments and Turnover as Determinant of Insulin Sensitivity (MISTY).