The role of palm olein on insulin resistance, which predisposes to disease progression of type 2 diabetes, is unclear. This article summarises the effects of substituting palm olein with carbohydrates on insulin sensitivity. Two intervention studies have reported conflicting findings. The RISCK (Reading, Imperial, Surreys, Cambridge and King’s) study suggested that saturated fat-enriched diet consisting of mainly palm oil and milk fat did not differ from both high and low glycemic carbohydrates on insulin sensitivity in subjects at risk of developing metabolic syndrome. However, another study reported reduced insulin sensitivity after a diet enriched with palm olein and butter compared with high carbohydrate intake. No epidemiological data exists in this context. More clinical trials using solely palm olein in this area are needed. Further well-controlled large scale studies are needed to furnish the information on palm olein replacement with carbohydrates in diabetes prevention.