Obesity and type-2 diabetes mellitus (T2DM) are interrelated metabolic disorders primarily driven by overnutrition and physical inactivity, which oftentimes entails a transition from obesity to T2DM. Compromised musculoskeletal health consistently emerges as a common hallmark in the progression of these metabolic disorders. Skeletal muscle atrophy and dysfunction can further impair whole-body metabolism and reduce physical exercise capacity, thus instigating a vicious cycle that further deteriorates the underlying conditions. However, the myocellular repercussions of these metabolic disturbances remain to be completely clarified. Insulin signaling not only facilitates skeletal muscle glucose uptake but also plays a central role in skeletal muscle anabolism mainly due to suppression of catabolic pathways and facilitating an anabolic response to nutrient feeding. Chronic overnutrition may trigger different myocellular mechanisms proposed to contribute to insulin resistance and aggravate skeletal muscle atrophy and dysfunction. These mechanisms mainly include the inactivation of insulin signaling components through sustained activation of stress-related pathways, mitochondrial dysfunction, a shift to glycolytic skeletal muscle fibers, and hyperglycemia. In the present review, we aim to delve on these mechanisms, providing an overview of the myocellular processes involved in skeletal muscle atrophy and dysfunction under chronic overnutrition, and their contribution to the progression to T2DM.