•  It is known that saturated fatty acids play a role in the progression of insulin resistance in skeletal muscle while physical activity promotes insulin sensitivity. •  The effect of diet and exercise on muscle satellite/stem cells is not well defined: we found that differentiated human muscle satellite cells exhibit metabolic differences. These differences were associated with physical activity level and may reflect a memory of the in vivo environment. •  Differentiated muscle satellite cells from physically active individuals have a higher tolerance to saturated fatty acids reflected by a partial protection from fatty acid‐induced insulin resistance. •  Physical activity and diet have significant effects on the physiological function of differentiated human muscle satellite cells. As these cells exhibit some phenotypes associated with in vivo adaptations and are involved in muscle maintenance, dysregulatory function could have profound effects on health. Abstract  The aim of this study was to investigate whether physical activity is associated with preserved muscle metabolism in human myotubes challenged with saturated fatty acids. Human muscle satellite cells were isolated from sedentary or active individuals and differentiated into myocytes in culture. Metabolic differences were then investigated in the basal state or after chronic palmitate treatment. At basal, myocytes from sedentary individuals exhibited higher CD36 and HSP70 protein expression as well as elevated phosphorylation of c‐Jun NH2‐terminal kinase (JNK) and insulin receptor substrate 1 (IRS1) serine307 compared to myocytes from active individuals. Despite equal lipid accumulation following palmitate treatment, myocytes from sedentary individuals exhibited delayed acetyl coenzyme A carboxylase phosphorylation compared to the active group. Myocytes from sedentary individuals had significantly higher basal glucose uptake and palmitate promoted insulin resistance in sedentary myocytes. Importantly, myocytes from active individuals were partially protected from palmitate‐induced insulin resistance. Palmitate treatment enhanced IRS1 serine307 phosphorylation in myocytes from sedentary individuals and correlated positively to JNK phosphorylation. In conclusion, muscle satellite cells retain metabolic differences associated with physical activity. Physical activity partially protects myocytes from fatty acid‐induced insulin resistance and inactivity is associated with dysregulation of metabolism in satellite cells challenged with palmitate. Although the benefits of physical activity on whole body physiology have been well investigated, this paper presents novel findings that both diet and exercise impact satellite cells directly. Given the fact that satellite cells are important for muscle maintenance, a dysregulated function could have profound effects on health. Therefore the effects of lifestyle on satellite cells needs to be delineated.