An elevated intracellular lipid contents resulted from lipid oversupply links obesity to insulin resistance. Flavanol-rich lychee fruit extract, oligonol, exhibited anti-obesity property in vitro and in vivo; however, the effects of oligonol on peripheral lipid metabolism and insulin sensitivity have not been fully investigated. We hypothesized that oligonol alleviated insulin resistance via decreasing intracellular lipid contents in peripheral tissues. Dietary oligonol supplementation (20 or 200 mg/kg bw) reduced glucose and insulin levels, improved oral glucose tolerance, and suppressed inflammatory markers, MCP-1 and IL-6, in High-Fat diet (HFD) induced obese mice. Marked decreases in subcutaneous and visceral fat area, adipocyte size, and adipocyte released hormones including leptin and resistin by high-dose oligonol treatment were associated with downregulation of PPARγ gene expression. Significantly reduced intrahepatocellular lipid contents and hepatic triglyceride levels by oligonol (both doses) were associated with downregulation of mTOR/SREBP-1-mediated de novo lipogenesis. In skeletal muscle, oligonol enhanced Sirtuin1 protein expression and AMPKα activation, consequently resulted in reductions of intramuscular lipid contents and triglyceride levels and restoration of IRS-1 and AS160 phosphorylation. Oligonol reduced intracellular lipid contents in liver and skeletal muscle and suppressed inflammatory markers, thereby alleviating HFD-induced insulin resistance.