Obesity is associated with chronic low-grade inflammation that negatively impacts insulin sensitivity. Here, we show that high-fat diet can increase NF-kappaB activation in mice, which leads to a sustained elevation in level of IkappaB kinase epsilon (IKKepsilon) in liver, adipocytes, and adipose tissue macrophages. IKKepsilon knockout mice are protected from high-fat diet-induced obesity, chronic inflammation in liver and fat, hepatic steatosis, and whole-body insulin resistance. These mice show increased energy expenditure and thermogenesis via enhanced expression of the uncoupling protein UCP1. They maintain insulin sensitivity in liver and fat, without activation of the proinflammatory JNK pathway. Gene expression analyses indicate that IKKepsilon knockout reduces expression of inflammatory cytokines, and changes expression of certain regulatory proteins and enzymes involved in glucose and lipid metabolism. Thus, IKKepsilon may represent an attractive therapeutic target for obesity, insulin resistance, diabetes, and other complications associated with these disorders.