In diabetic rodents and humans, glucose transporter 4 (GLUT4) expression is suppressed in adipocytes in association with insulin resistance. Transgenic mice overexpressing GLUT4 selectively in fat have enhanced glucose disposal in vivo and massively increased glucose transport in adipocytes. To determine whether overexpression can be maintained in diabetes and whether it can prevent insulin resistance, we rendered wild-type and transgenic mice diabetic with streptozotocin. After 12–14 days, blood glucose was more than 21.4 mm and plasma insulin was 1.06 ng/ml or less in both diabetic groups in the fed state. Body weight was reduced and gonadal fat pad weight and adipocyte size were 52–75% smaller in both nontransgenic and transgenic diabetic mice, compared with nondiabetic. Basal and maximally-stimulated rates of lipolysis were similar in adipocytes from nontransgenic and transgenic mice, but the ED₅₀ for isoproterenol stimulation was 50% lower in transgenic mice. There was no difference in the sensitivity to insulin to inhibit lipolysis. In adipocytes of nontransgenic diabetic mice, GLUT4 protein was reduced 34%, with a 46% reduction in insulin stimulated glucose transport. In contrast, in adipocytes of transgenic diabetic mice, GLUT4 remained 21-fold overexpressed, resulting in 21-fold increased basal and 10-fold increased insulin stimulated glucose transport. Injection of insulin (0.7 mU/g BW) resulted in a 35% decrease in blood glucose in transgenic diabetic mice (P < 0.05), with no effect in nontransgenic diabetic mice. Thus, high-level overexpression of GLUT4 driven by a fat specific promoter can be maintained with insulinopenic diabetes, even when fat cell metabolism is markedly altered. Overexpression of GLUT4 in adipocytes prevents insulin resistant glucose transport at the cellular level and improves insulin action in vivo, even with overt diabetes.