Recent studies have shown that genetic deficiency of the adipocyte fatty acid-binding protein (aP2) results in minor alterations of plasma lipids and adipocyte development but provides significant protection from dietary obesity-induced hyperinsulinemia and insulin resistance. To identify potential mechanisms responsible for this phenotype, we examined lipolysis and insulin secretion in aP2-/- mice. Beta-adrenergic stimulation resulted in a blunted rise of blood glycerol levels in aP2-/- compared with aP2+/+ mice, suggesting diminished lipolysis in aP2-/- adipocytes. Confirming this, primary adipocytes isolated from aP2-/- mice showed attenuated glycerol and free fatty acid (FFA) release in response to dibutyryl cAMP. The decreased lipolytic response seen in the aP2-/- mice was not associated with altered expression levels of hormone-sensitive lipase or perilipin. The acute insulin secretory response to beta-adrenergic stimulation was also profoundly suppressed in aP2-/- mice despite comparable total concentrations and only minor changes in the composition of systemic FFAs. To address whether levels of specific fatty acids are different in aP2-/- mice, the plasma FFA profile after beta-adrenergic stimulation was determined. Significant reduction in both stearic and cis-11-eicoseneic acids and an increase in palmitoleic acid were observed. The response of aP2-/- mice to other insulin secretagogues such as arginine and glyburide was similar to that of aP2+/+ mice, arguing against generally impaired function of pancreatic beta-cells. Finally, no aP2 expression was detected in isolated pancreatic islet cells. These results provide support for the existence of an adipo-pancreatic axis, the proper action of which relies on the presence of aP2. Consequently, aP2's role in the pathogenesis of type 2 diabetes might involve regulation of both hyperinsulinemia and insulin resistance through its impact on both lipolysis and insulin secretion.