Adiponectin (Ad) is a hormone secreted by adipocytes that regulates energy homeostasis and glucose and lipid metabolism. However, the signaling pathways that mediate the metabolic effects of Ad remain poorly identified. Here we show that phosphorylation and activation of the 5'-AMP-activated protein kinase (AMPK) are stimulated with globular and full-length Ad in skeletal muscle and only with full-length Ad in the liver. In parallel with its activation of AMPK, Ad stimulates phosphorylation of acetyl coenzyme A carboxylase (ACC), fatty-acid oxidation, glucose uptake and lactate production in myocytes, phosphorylation of ACC and reduction of molecules involved in gluconeogenesis in the liver, and reduction of glucose levels in vivo. Blocking AMPK activation by dominant-negative mutant inhibits each of these effects, indicating that stimulation of glucose utilization and fatty-acid oxidation by Ad occurs through activation of AMPK. Our data may provide a novel paradigm that an adipocyte-derived antidiabetic hormone, Ad, activates AMPK, thereby directly regulating glucose metabolism and insulin sensitivity in vitro and in vivo.