Adiponectin is produced exclusively by adipocytes, and its serum concentration is inversely associated with adiposity. This study examines the relationship among diabetes, renal function, and serum adiponectin in Pima Indians. Serum adiponectin was measured in 1069 people in whom glycemia and renal function had been measured. Serum adiponectin, adjusted for age, sex, and body mass index, was lowest in those with impaired glucose regulation or diabetes of less than 10 yr duration and highest in those with normal glucose tolerance or diabetes of duration of at least 10 yr. Both urinary albumin to creatinine ratio (ACR) and serum creatinine were positively correlated with adiponectin (Spearman’s r = 0.43; P < 0.0001, and r = 0.37; P < 0.0001, respectively) in diabetic subjects. After stratification by albuminuria (normoalbuminuria ACR < 30 mg/g, microalbuminuria ACR = 30–299 mg/g, and macroalbuminuria ACR ≥ 300 mg/g), the highest adiponectin concentration was in the macroalbuminuria group (geometric mean = 9.6 μg/ml) and the lowest was in the normoalbuminuric group (geometric mean = 5.6 μg/ml). After adjustment for age, sex, body mass index, and diabetes duration, the serum adiponectin concentration in the macroalbuminuria group was significantly higher than in both other groups (P < 0.0001). Serum adiponectin is lowest in the presence of impaired glucose regulation and early diabetes. In the presence of diabetes, serum adiponectin is positively associated with abnormal renal function and diabetes duration.