Reactive oxygen species (ROS) production has recently been established as an essential contributor in the pathogenesis of obesity-associated insulin resistance. The FoxO1 pathway plays a role not only in nutrient sensing but also in regulating ROS production. We exposed adipocytes to free fatty acids (FFA) and demonstrated that FoxO1 protein levels decrease in a dose-dependent manner. The FoxO1 downregulation correlated with an increase in the production of ROS and a proinflammatory adipokine pattern characterized by a decrease in adiponectin and an increase in IL-6, plasminogen activator inhibitor-1, and monocyte chemotactic protein-1 mRNA expression levels. Similarly, a decrease in FoxO1 protein levels was seen in adipocytes of db/db mice compared with controls. Treatment with the sirtuin agonist resveratrol, which translocates FoxO1 to the nucleus, increased FoxO1 protein levels in adipocytes exposed to FFA. This correlated with a decrease in the generation of ROS and a partial reversal of the proinflammatory adipokine pattern. Together these results indicate that the insulin-resistant adipocyte produced by the exposure to a high concentration of fatty acids is characterized by decreased levels of FoxO1. These data also suggest that modulation of the Sirt1/FoxO1 pathway is a potentially useful therapeutic target for the obesity-induced dysfunctional adipocyte.