Low adiponectin expression is common in obesity and is tightly linked to insulin resistance and fat mass expansion. Whereas normal adipocytes offer effective metabolic buffering through well-controlled release and uptake of free fatty acids on demand, adipocyte expansion induced by caloric excess and modulated by genetic, regional, and systemic factors elicits major unfavorable changes in fat cell phenotypes. Large, dysfunctional adipocytes show increased lipolysis and enhanced expression and secretion of proinflammatory and pro-oxidative cytokines. Low adiponectin secretion is a hallmark of impaired adipocyte function; its secretion is inhibited by cytokines such as tumor necrosis factor alpha, interleukin 6 and plasminogen activator inhibitor 1 and by high oxidative stress induced by increased fatty acids that activate nicotinamide adenine dinucleotide phosphate-oxidase. The ensuing hypoadiponectinemia may aggravate insulin resistance and facilitate the evolution of type 2 diabetes. Only massive weight loss allows true and sustained recovery of normal fat cell function as reflected by adiponectin secretion.