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Aims/hypothesis: It is well established that physical activity, abdominal ectopic fat and glycaemic regulation are related but the underlying structure of these relationships is unclear. The previously proposed twin-cycle hypothesis (TC) provides a mechanistic basis for impairment in glycaemic control through the interactions of substrate availability, substrate metabolism and abdominal ectopic fat accumulation. Here, we hypothesise that the effect of physical activity in glucose regulation is mediated by the twin-cycle. We aimed to examine this notion in the Innovative Medicines Initiative Diabetes Research on Patient Stratification (IMI DIRECT) Consortium cohorts comprised of participants with normal or impaired glucose regulation (cohort 1: N ≤ 920) or with recently diagnosed type 2 diabetes (cohort 2: N ≤ 435)., Methods: We defined a structural equation model that describes the TC and fitted this within the IMI DIRECT dataset. A second model, twin-cycle plus physical activity (TC-PA), to assess the extent to which the effects of physical activity in glycaemic regulation are mediated by components in the twin-cycle, was also fitted. Beta cell function, insulin sensitivity and glycaemic control were modelled from frequently sampled 75 g OGTTs (fsOGTTs) and mixed-meal tolerance tests (MMTTs) in participants without and with diabetes, respectively. Abdominal fat distribution was assessed using MRI, and physical activity through wrist-worn triaxial accelerometry. Results are presented as standardised beta coefficients, SE and p values, respectively., Results: The TC and TC-PA models showed better fit than null models (TC: χ 2  = 242, p = 0.004 and χ 2  = 63, p = 0.001 in cohort 1 and 2, respectively; TC-PA: χ 2  = 180, p = 0.041 and χ 2  = 60, p = 0.008 in cohort 1 and 2, respectively). The association of physical activity with glycaemic control was primarily mediated by variables in the liver fat cycle., Conclusions/interpretation: These analyses partially support the mechanisms proposed in the twin-cycle model and highlight mechanistic pathways through which insulin sensitivity and liver fat mediate the association between physical activity and glycaemic control.