Adipocyte-specific secreted molecules, termed adipokines, have dispelled the notion of adipose tissue as an inert storage depot for lipids, and highlighted its role as an active endocrine organ that monitors and alters whole-body metabolism and maintains energy homeostasis. One of these adipokines, adiponectin (also known as Acrp30, AdipoQ, and GBP28), has gained significant attention recently as a mediator of insulin sensitivity. Many clinical reports and genetic studies over the past few years demonstrate decreased circulating levels of this hormone in metabolic dysfunction, such as obesity and insulin resistance, in both humans and animal models. Pharmacologic adiponectin treatments in rodents increase insulin sensitivity, although the primary site and detailed mechanism of action is yet to be determined. The phenotypes of adiponectin-deficient and transgenic adiponectin-overproducing animal models underscore the role of adiponectin in the maintenance of glucose and lipid homeostasis.