Obesity-induced inflammation contributes to the development of obesity-related metabolic disorders such as insulin resistance, type 2 diabetes, fatty liver disease, and cardiovascular disease. In this study, we investigated whether dietary capsaicin can reduce obesity-induced inflammation and metabolic disorders such as insulin resistance and hepatic steatosis. Male C57BL/6 obese mice fed a high-fat diet for 10 weeks received a supplement of 0.015% capsaicin for a further 10 weeks and were compared with unsupplemented controls. Glucose intolerance was estimated by glucose tolerance tests. Transcripts of adipocytokine genes and the corresponding proteins were measured by reverse transcription-PCR and enzyme-linked immunosorbent assay, and macrophage numbers were determined by flow cytometric analysis. Transient receptor potential vanilloid type-1 (TRPV-1), peroxisome proliferator-activated receptor (PPAR)-alpha, and PPARgamma coactivator-1alpha (PGC-1alpha) mRNAs were also measured by RT-PCR, and PPARalpha luciferase assays were performed. Dietary capsaicin lowered fasting glucose, insulin, leptin levels, and markedly reduced the impairment of glucose tolerance in obese mice. Levels of tumor necrosis factor-alpha (TNFalpha), monocyte chemoattractant protein-1 (MCP-1), and interleukin (IL)-6 mRNAs and proteins in adipose tissue and liver decreased markedly, as did macrophage infiltration, hepatic triglycerides, and TRPV-1 expression in adipose tissue. At the same time, the mRNA/protein of adiponectin in the adipose tissue and PPARalpha/PGC-1alpha mRNA in the liver increased. Moreover, luciferase assays revealed that capsaicin is capable of binding PPARalpha. Our data suggest that dietary capsaicin may reduce obesity-induced glucose intolerance by not only suppressing inflammatory responses but also enhancing fatty acid oxidation in adipose tissue and/or liver, both of which are important peripheral tissues affecting insulin resistance. The effects of capsaicin in adipose tissue and liver are related to its dual action on PPARalpha and TRPV-1 expression/activation.