Obesity and type 2 diabetes are associated with a state of abnormal inflammatory response. While this correlation has also been recognized in the clinical setting, its molecular basis and physiological significance are not yet fully understood. Studies in recent years have provided important insights into this curious phenomenon. The state of chronic inflammation typical of obesity and type 2 diabetes occurs at metabolically relevant sites, such as the liver, muscle, and most interestingly, adipose tissues. The biological relevance of the activation of inflammatory pathways became evident upon the demonstration that interference with these pathways improve or alleviate insulin resistance. The abnormal production of tumor necrosis factor alpha (TNF-alpha) in obesity is a paradigm for the metabolic significance of this inflammatory response. When TNF-alpha activity is blocked in obesity, either biochemically or genetically, the result is improved insulin sensitivity. Studies have since focused on the identification of additional inflammatory mediators critical in metabolic control and on understanding the molecular mechanisms by which inflammatory pathways are coupled to metabolic control. Recent years have seen a critical progress in this respect by the identification of several downstream mediators and signaling pathways, which provide the crosstalk between inflammatory and metabolic signaling. These include the discovery of c-Jun N-terminal kinase (JNK) and I kappa beta kinase (I kappa K) as critical regulators of insulin action activated by TNF-alpha and other inflammatory and stress signals, and the identification of potential targets. Here, the role of the JNK pathway in insulin receptor signaling, the impact of blocking this pathway in obesity and the mechanisms underlying JNK-induced insulin resistance will be discussed.