Obesity is highly associated with insulin resistance and is the biggest risk factor for non-insulin-dependent diabetes mellitus. The molecular basis of this common syndrome, however, is poorly understood. It has been suggested that tumour necrosis factor (TNF)-alpha is a candidate mediator of insulin resistance in obesity, as it is overexpressed in the adipose tissues of rodents and humans and it blocks the action of insulin in cultured cells and whole animals. To investigate the role of TNF-alpha in obesity and insulin resistance, we have generated obese mice with a targeted null mutation in the gene encoding TNF-alpha and those encoding the two receptors for TNF-alpha. The absence of TNF-alpha resulted in significantly improved insulin sensitivity in both diet-induced obesity and that resulting for the ob/ob model of obesity. The TNFalpha-deficient obese mice had lower levels of circulating free fatty acids, and were protected from the obesity-related reduction in the insulin receptor signalling in muscle and fat tissues. These results indicate that TNF-alpha is an important mediator of insulin resistance in obesity through its effects on several important sites of insulin action.