BACKGROUND: Niaspan® (extended-release niacin) is a nicotinic acid formulation used to treat dyslipidemia in obese subjects. Niaspan binds to the GPR109A receptor in adipose tissue and stimulates adiponectin secretion, which should improve insulin sensitivity. However, Niaspan therapy often causes insulin resistance. The purpose of this study was to evaluate whether Niaspan-induced changes in plasma adiponectin concentration are associated with a blunting of Niaspan's adverse effect on insulin action in obese subjects with non-alcoholic fatty liver disease (NAFLD). METHODS: A hyperinsulinemic-euglycemic clamp procedure was used to assess muscle insulin sensitivity before and after 16 weeks of Niaspan therapy in 9 obese subjects with NAFLD [age 43 ± 5 years; BMI 35.1 ± 1.3 (means ± SEM)]. RESULTS: Niaspan therapy did not affect body weight (99.1 ± 4.2 vs. 100 ± 4.4 kg) or percent body fat (37.8 ± 2.5 vs. 37.0 ± 2.5%). However, Niaspan therapy caused a 22% reduction in insulin-mediated glucose disposal (p < 0.05). The deterioration in glucose disposal was inversely correlated with the Niaspan-induced increase in plasma adiponectin concentration (r = 0.67, p = 0.05). CONCLUSIONS: These results demonstrate that Niaspan causes skeletal muscle insulin resistance, independent of changes in body weight or body fat, and the Niaspan-induced increase in plasma adiponectin concentration might partially ameliorate Niaspan's adverse effect on insulin action in obese subjects with NAFLD.