The etiology of insulin resistance (IR) in Type 1 Diabetes (T1D) is unclear; however, intramyocellular lipids (IMCL) are likely contributors. While exercise lessens IR and IMCL content; T1D patients elevate glycemia to offset exercise-induced hypoglycemic risk. The preferred treatment for T1D patients is tight glucose management through intensive insulin therapy (IIT); however, IIT is accompanied with a sedentary lifestyle. The purpose of this study was to examine IR development and IMCL in combined exercise (DARE; aerobic/resistance) and IIT-treated T1D animals. 76 rats were divided into control sedentary (C), diabetic sedentary (CD), diabetes sedentary intensive insulin therapy (DIT) and DARE groups. Following streptozotocin (STZ), glycemia was maintained at either 9-15 mM (CD, DARE) or 5-9 mM (DIT) using insulin. DARE alternated between running and weighted climbing for 12 weeks. Results demonstrate that DARE exhibited reduced onset of IR compared with C, DIT and CD, indicated by increased glucose infusion rate (hyperinsulinemic-euglycemic-clamp). A shift in lipid metabolism was evident whereby diacylglycerol was elevated in DIT compared to DARE, while triacylglycerol was elevated in DARE. These findings indicate enhanced IMCL metabolism and the sequestration of fat as neutral triacylglycerol leads to reduced IR in DARE. In contrast, IIT and sedentary behavior leads to diacylglycerol accumulation and IR. •Despite moderate hyperglycemia, combined exercise leads to greater increases in insulin sensitivity in comparison to intensive insulin therapy alone.•Combined exercise leads to a reduction in harmful DAG accumulation in skeletal muscle that was evident in intensively insulin treated Type 1 diabetic rats.•Exercise may mitigate insulin resistance development in Type 1 Diabetes through the increased ability to oxidize glucose and harmful fat intermediates in skeletal muscle rather than via improvements to the insulin signaling pathway.