Introduction. The mechanisms underlying the association between insulin resistance and intrahepatic lipid (IHL) accumulation are not completely understood. We sought to determine whether this association was explained by differences in fasting non-esterified fatty acid (NEFA) levels and/or NEFA suppression after oral glucose loading. Materials and Methods. We performed a cross-sectional analysis of 70 healthy participants in the Hertfordshire Physical Activity Trial (39 males, age 71.3 ± 2.4 years) who underwent oral glucose tolerance testing with glucose, insulin, and NEFA levels measured over two hours. IHL was quantified with magnetic resonance spectroscopy. Insulin sensitivity was measured with the oral glucose insulin sensitivity (OGIS) model, the leptin: adiponectin ratio (LAR), and the homeostasis model assessment (HOMA). Results. Measures of insulin sensitivity were not associated with fasting NEFA levels, but OGIS was strongly associated with NEFA suppression at 30 minutes and strongly inversely associated with IHL. Moreover, LAR was strongly inversely associated with NEFA suppression and strongly associated with IHL. This latter association (beta = 1.11 [1.01, 1.21], P = 0.026) was explained by reduced NEFA suppression (P = 0.24 after adjustment). Conclusions. Impaired postprandial NEFA suppression, but not fasting NEFA, contributes to the strong and well-established association between whole body insulin resistance and liver fat accumulation.