Adiponectin is a 29-kDa adipocyte protein that has been linked to the insulin resistance of obesity and lipodystrophy. To better understand the regulation of adiponectin expression, we measured plasma adiponectin and adipose tissue adiponectin mRNA levels in nondiabetic subjects with varying degrees of obesity and insulin resistance. Plasma adiponectin and adiponectin mRNA levels were highly correlated with each other (r = 0.80, P < 0.001), and obese subjects expressed significantly lower levels of adiponectin. However, a significant sex difference in adiponectin expression was observed, especially in relatively lean subjects. When men and women with a BMI <30 kg/m² were compared, women had a twofold higher percent body fat, yet their plasma adiponectin levels were 65% higher (8.6 ± 1.1 and 14.2 ± 1.6 μg/ml in men and women, respectively; P < 0.02). Plasma adiponectin had a strong association with insulin sensitivity index (S_I) (r = 0.67, P < 0.0001, n = 51) that was not affected by sex, but no relation with insulin secretion. To separate the effects of obesity (BMI) from S_I, subjects who were discordant for S_I were matched for BMI, age, and sex. Using this approach, insulin-sensitive subjects demonstrated a twofold higher plasma level of adiponectin (5.6 ± 0.6 and 11.2 ± 1.1 μg/ml in insulin-resistant and insulin-sensitive subjects, respectively; P < 0.0005). Adiponectin expression was not related to plasma levels of leptin or interleukin-6. However, there was a significant inverse correlation between plasma adiponectin and tumor necrosis factor (TNF)-α mRNA expression (r = −0.47, P < 0.005), and subjects with the highest levels of adiponectin mRNA expression secreted the lowest levels of TNF-α from their adipose tissue in vitro. Thus, adiponectin expression from adipose tissue is higher in lean subjects and women, and is associated with higher degrees of insulin sensitivity and lower TNF-α expression.