The earliest defect in developing type 2 diabetes is insulin resistance, characterized by decreased glucose transport and metabolism in muscle and adipocytes. The glucose transporter GLUT4 mediates insulin-stimulated glucose uptake in adipocytes and muscle by rapidly moving from intracellular storage sites to the plasma membrane. In insulin-resistant states such as obesity and type 2 diabetes, GLUT4 expression is decreased in adipose tissue but preserved in muscle. Because skeletal muscle is the main site of insulin-stimulated glucose uptake, the role of adipose tissue GLUT4 downregulation in the pathogenesis of insulin resistance and diabetes is unclear. To determine the role of adipose GLUT4 in glucose homeostasis, we used Cre/loxP DNA recombination to generate mice with adipose-selective reduction of GLUT4 (G4A-/-). Here we show that these mice have normal growth and adipose mass despite markedly impaired insulin-stimulated glucose uptake in adipocytes. Although GLUT4 expression is preserved in muscle, these mice develop insulin resistance in muscle and liver, manifested by decreased biological responses and impaired activation of phosphoinositide-3-OH kinase. G4A-/- mice develop glucose intolerance and hyperinsulinaemia. Thus, downregulation of GLUT4 and glucose transport selectively in adipose tissue can cause insulin resistance and thereby increase the risk of developing diabetes.