Adiponectin is an adipocyte-derived insulin-sensitizing hormone with antidiabetic, antiinflammatory, and antiatherosclerotic properties. A decreased serum level of adiponectin in obesity has been identified as an independent risk factor for diabetes and cardiovascular complications, suggesting that pharmacological intervention aimed at elevating adiponectin production might hold promise for the treatment and/or prevention of these diseases. Here we report the identification of two structurally related natural compounds (astragaloside II and isoastragaloside I) from the medicinal herb Radix Astragali that possess such an activity. Astragaloside II and isoastragaloside I selectively increased adiponectin secretion in primary adipocytes without any obvious effects on a panel of other adipokines. Furthermore, an additive effect on induction of adiponectin production was observed between these two compounds and rosiglitazone, a thiazolidinedione class of insulin-sensitizing drugs. Chronic administration of astragaloside II and isoastragaloside I in both dietary and genetic obese mice significantly elevated serum levels of total adiponectin and selectively increased the composition of its high molecular weight oligomeric complex. These changes were associated with an alleviation of hyperglycemia, glucose intolerance, and insulin resistance. By contrast, the beneficial effects of these two compounds on insulin sensitivity and glucose metabolism were diminished in adiponectin knockout mice. In conclusion, our results suggest that pharmacological elevation of circulating adiponectin alone is sufficient to ameliorate insulin resistance and diabetes and support the use of adiponectin as a biomarker for future drug discovery. The two natural compounds might provide the lead as a novel class of therapeutics for obesity-related diseases.