Reduced peroxisome proliferator-activated receptor γ coactivator-1α (PGC-1α) expression and mitochondrial dysfunction in adipose tissue have been associated with obesity and insulin resistance. Whether this association is causally involved in the development of insulin resistance or is only a consequence of this condition has not been clearly determined. Here we studied the effects of adipose-specific deficiency of PGC-1α on systemic glucose homeostasis. Loss of PGC-1α in white fat resulted in reduced expression of the thermogenic and mitochondrial genes in mice housed at ambient temperature, whereas gene expression patterns in brown fat were not altered. When challenged with a high-fat diet, insulin resistance was observed in the mutant mice, characterized by reduced suppression of hepatic glucose output. Resistance to insulin was also associated with an increase in circulating lipids, along with a decrease in the expression of genes regulating lipid metabolism and fatty acid uptake in adipose tissues. Taken together, these data demonstrate a critical role for adipose PGC-1α in the regulation of glucose homeostasis and a potentially causal involvement in the development of insulin resistance.