In the Greenlandic Inuit population, 4% are homozygous carriers of a genetic nonsense TBC1D4 p.Arg684Ter variant leading to loss of the muscle-specific isoform of TBC1D4 and an approximately tenfold increased risk of type 2 diabetes1. Here we show the metabolic consequences of this variant in four female and four male homozygous carriers and matched controls. An extended glucose tolerance test reveals prolonged hyperglycaemia followed by reactive hypoglycaemia in the carriers. Whole-body glucose disposal is impaired during euglycaemic-hyperinsulinaemic clamp conditions and associates with severe insulin resistance in skeletal muscle only. Notably, a marked reduction in muscle glucose transporter GLUT4 and associated proteins is observed. While metabolic regulation during exercise remains normal, the insulin-sensitizing effect of a single exercise bout is compromised. Thus, loss of the muscle-specific isoform of TBC1D4 causes severe skeletal muscle insulin resistance without baseline hyperinsulinaemia. However, physical activity can ameliorate this condition. These observations offer avenues for personalized interventions and targeted preventive strategies.