Insulin-like growth factor binding protein (IGFBP)-3 binds to IGF and modulates their actions and also possesses intrinsic activities. We investigated its effects on insulin action and found that when IGFBP-3 was added to fully differentiated 3T3-L1 adipocytes in culture, insulin-stimulated glucose transport was significantly inhibited to 60% of control in a time- and dose-dependent manner. Tumor necrosis factor (TNF)-alpha treatment also inhibited glucose transport to the same degree as IGFBP-3 and, in addition, increased IGFBP-3 levels 3-fold. Co-treatment with TNF-alpha and IGFBP-3 antisense partially prevented the inhibitory effect of TNF-alpha on glucose transport, indicating a role for IGFBP-3 in cytokine-induced insulin resistance. Insulin-stimulated phosphorylation of the insulin receptor was markedly decreased by IGFBP-3 treatment. IGFBP-3 treatment suppressed adiponectin expression in 3T3-L1 adipocytes. Infusion of IGFBP-3 to Sprague-Dawley rats for 3 h decreased peripheral glucose uptake by 15% compared with controls as well as inhibiting glycogen synthesis. Systemic administration of IGFBP-3 to rats for 7 d resulted in a dramatic 40% decrease in peripheral glucose utilization and glycogen synthesis. These in vitro and in vivo findings demonstrate that IGFBP-3 has potent insulin-antagonizing capability and suggest a role for IGFBP-3 in cytokine-induced insulin resistance and other mechanisms involved in the development of type-2 diabetes.