Background: The involvement of muscle triacylglycerol (TAG) storage in the onset of insulin resistance is questioned and the attention has shifted towards inhibition of insulin signalling by the lipid intermediate diacylglycerol (DAG). The enzyme 1,2-acylCoA:diacylglyceroltransferase-1 (DGAT1) esterifies a fatty acyl-CoA on DAG to form TAG. Therefore, the aim of the present study was to investigate if unilateral overexpression of DGAT1 in adult rat Tibialis anterior (TA) muscle will increase conversion of the lipid intermediate DAG into TAG, thereby improving muscle insulin sensitivity. Methodology/Principal Findings: The DGAT1 gene construct was injected in the left TA muscle of male rats on chow or high-fat (45% kcal) diet for three weeks, followed by application of one 800 V/cm and four 80 V/cm pulses, using the contralateral leg as sham-electroporated control. Seven days after electroporation, muscle specific insulin sensitivity was assessed with a hyperinsulinemic euglycemic clamp using 2-deoxy-[3H]glucose. Here, we provide evidence that unilateral overexpression of DGAT1 in TA muscle of male rats is associated with an increased rather than decreased DAG content. Strikingly, this increase in DAG content was accompanied by improved muscle insulin sensitivity. Interestingly, markers of muscle lipolysis and mitochondrial function were also increased in DGAT1 overexpressing muscle. Conclusions/Significance: We conclude that unilateral DGAT1 overexpression can rescue insulin sensitivity, possibly by increasing DAG and TAG turnover in skeletal muscle. In case of a proper balance between the supply and oxidation of fatty acids in skeletal muscle, the lipid intermediate DAG may not exert harmful effects on insulin signalling.