When you eat, your body detects the raised levels of glucose and fatty acids in your blood (having been absorbed through your intestine), and your pancreas releases insulin. Insulin essentially signals to your various tissues "WE ARE IN FED STATE, GUYS! EAT UP." This means that your liver stops making glucose on its own (gluconeogenesis drops), since this would be wasteful. Your liver starts breaking down the glucose (glycolysis: breaks down glucose to pyruvate, Krebs Cycle: Oxidizes acetyl-CoA (made from pyruvate), essentially stripping off electrons, oxidative phosphorylation: Takes those electrons and makes energy (ATP) out of it).

Simultaneously, your liver is replenishing stores of glycogen (a storage form of glucose). Your fat cells are taking up the extra fat in the blood, and turning those fatty acids (which are toxic) into a safe, neutral form: Triacylglycerides (TG or TAG). Your muscles are taking up glucose and fatty acids from the blood, and breaking them down the same way as in the liver: glycolysis--> krebs cycle --> oxidative phosphorylation, or for fat straight into beta oxidation.

NOW, on the other hand, if you haven't eaten in a while, your body needs to start using up its stored forms of energy, as well as make its own. This is signalled by glucagon (or in the case of stress, adrenaline/epinephrine). Your liver needs to break down the glycogen into its substituent glucose, and send this out to the body. Since your brain requires glucose (and at later stages can use ketone bodies), and can't deal with fatty acids, your liver needs to constantly be making glucose for your brain. The fat tissue (white adipose) is signaled to release its stores of trigylcerides into the blood, which are taken up my muscle (same process as before) and liver. The muscle can only break down the fatty acids into energy, but the liver can actually use energy from breaking down fatty acids and make new glucose, which it can then export into the blood.

...

Also, fat is distributed either subcutaneously or viscerally. The former is fat deposits under the skin (e.g. thighs, buttocks, belly, etc.), while the latter is fat deposits on your organs (i.e. liver, heart, etc.). The latter is more typical of men than women, and is also a much stronger indicator of potential metabolic disorders like diabetes and insulin resistance. After menopause, fat redistribution to visceral is common in women.


http://www.reddit.com/r/askscience/comments/t3b91/do_muscles_use_the_fat_nearest_them_for_fuel/c4j6n08