Skeletal muscle accumulates ceramides in obesity, which contribute to the development of obesity-associated insulin resistance. However, it remained unclear which distinct ceramide species in this organ contributes to instatement of systemic insulin resistance. Here, ceramide profiling of high-fat diet (HFD)-fed animals revealed increased skeletal muscle C_18:0 ceramide content, concomitant with increased expression of ceramide synthase (CerS)1. Mice lacking CerS1, either globally or specifically in skeletal muscle (CerS1^ΔSkM), exhibit reduced muscle C_18:0 ceramide content and significant improvements in systemic glucose homeostasis. CerS1^ΔSkM mice exhibit improved insulin-stimulated suppression of hepatic glucose production, and lack of CerS1 in skeletal muscle improves systemic glucose homeostasis via increased release of Fgf21 from skeletal muscle. In contrast, muscle-specific deficiency of C_16:0 ceramide-producing CerS5 and CerS6 failed to protect mice from obesity-induced insulin resistance. Collectively, these results reveal the tissue-specific function of distinct ceramide species during the development of obesity-associated insulin resistance.