Short-term exercise training improves insulin action, but the impact of replacing the energy expended during exercise to prevent energy deficit is unclear. The purpose of this study was to establish the role of an energy deficit in mediating improved insulin action after short-term exercise training. Two groups of previously sedentary, overweight/obese subjects performed 6 consecutive days of moderate-intensity walking to expend approximately 500 kcal/day. In one group, energy and carbohydrate expended during exercise was replaced [balance group (BAL), n = 8] and in the other group, energy was not replaced [deficit group (DEF), n = 8]. Insulin action (blood glucose uptake during glucose infusion) and selected lipids and adipokines were measured pre- and posttraining. Training increased estimated daily energy expenditure by approximately 500 kcal/day (DEF = 469 +/- 45, BAL = 521 +/- 48), generating an energy deficit in DEF (-481 +/- 24 kcal/day) but not BAL (+8 +/- 20 kcal/day). Insulin action increased 40% in DEF (P = 0.032) but not BAL (-8.4%, P = 0.107). Hepatic glucose production was suppressed during glucose infusion in DEF (30.2 +/- 9.5%, P = 0.037) but not BAL (-10.0 +/- 7.4%, P = 0.417). Fasting leptin concentrations declined in DEF but not BAL. Six days of exercise training without energy replacement significantly increased insulin action. Restoring energy balance by refeeding the energy and carbohydrate expended during exercise resulted in no change in insulin action. These findings suggest that changes in short-term energy and/or carbohydrate balance play a key role in mediating the beneficial effects of exercise on whole body and hepatic insulin action.