Obesity in adolescents is associated with metabolic risk factors for type 2 diabetes, particularly insulin resistance and excessive accumulation of intrahepatic triglyceride (IHTG). The purpose of this study was to evaluate the effect of moderate weight loss on IHTG content and insulin sensitivity in obese adolescents who had normal oral glucose tolerance. Insulin sensitivity, assessed by using the hyperinsulinemic-euglycemic clamp technique in conjunction with stable isotopically labeled tracer infusion, and IHTG content, assessed by using magnetic resonance spectroscopy, were evaluated in eight obese adolescents (BMI 95th percentile for age and sex; age 15.3 0.6 years) before and after moderate diet-induced weight loss (8.2 2.0% of initial body weight). Weight loss caused a 61.6 8.5% decrease in IHTG content (P = 0.01), and improved both hepatic (56 18% increase in hepatic insulin sensitivity index, P = 0.01) and skeletal muscle (97 45% increase in insulin-mediated glucose disposal, P = 0.01) insulin sensitivity. Moderate diet-induced weight loss decreases IHTG content and improves insulin sensitivity in the liver and skeletal muscle in obese adolescents who have normal glucose tolerance. These results support the benefits of weight loss therapy in obese adolescents who do not have evidence of obesity-related metabolic complications during a standard medical evaluation.