Previous reports showed that recombinant fragments of adiponectin (adipo) displayed pharmacological effects when injected into rodents, but the relevance of these observations to the physiological function of adipo is unclear. We generated Adipo(-/-) mice by gene targeting. Adipo(-/-) mice are fertile with normal body and fat pad weights. Plasma glucose and insulin levels of Adipo(-/-) and Adipo(+/+) mice are similar under fasting conditions and during an intraperitoneal glucose tolerance test (GTT). Insulin tolerance test (ITT) also produces similar plasma glucose and insulin levels in the two groups of mice. Hyperinsulinemic-euglycemic clamp analysis showed that Adipo(-/-) and Adipo(+/+) mice have similar glucose infusion rates to maintain a similar serum glucose. High-fat diet feeding for 7 months led to similar weight gain and similar GTT and ITT responses. We next measured beta-oxidation and found it to be significantly increased in muscle and liver of Adipo(-/-) mice. In conclusion, our study indicates that absence of adipo causes increased beta-oxidation but does not cause glucose intolerance or insulin resistance in mice.