Chronic inflammation has been postulated to play an important role in the pathogenesis of insulin resistance. Inducible nitric oxide synthase (iNOS) has been implicated in many human diseases associated with inflammation. iNOS deficiency was shown to prevent high-fat diet-induced insulin resistance in skeletal muscle but not in the liver. A role for iNOS in fasting hyperglycemia and hepatic insulin resistance, however, remains to be investigated in obesity-related diabetes. To address this issue, we examined the effects of a specific inhibitor for iNOS, L-NIL, in obese diabetic (ob/ob) mice. iNOS expression was increased in the liver of ob/ob mice compared with wild-type mice. Treatment with iNOS inhibitor reversed fasting hyperglycemia with concomitant amelioration of hyperinsulinemia and improved insulin sensitivity in ob/ob mice. iNOS inhibitor also increased the protein expression of insulin receptor substrate (IRS)-1 and -2 1.5- and 2-fold, respectively, and enhanced IRS-1- and IRS-2-mediated insulin signaling in the liver of ob/ob mice. Exposure to NO donor and ectopically expressed iNOS decreased the protein expression of IRS-1 and -2 in cultured hepatocytes. These results suggest that iNOS plays a role in fasting hyperglycemia and contributes to hepatic insulin resistance in ob/ob mice.