Clinical studies have identified hypoadiponectinemia as an independent hypertension risk factor. It is known that adiponectin (APN) can directly cause vasodilation, but the doses required exceed physiologic levels several fold. In the current study, we determine the effect of physiologically relevant APN concentrations upon vascular tone, and investigate the mechanism(s) responsible. Physiologic APN concentrations alone induced no significant vasorelaxation. Interestingly, pretreatment of wild type mouse aortae with physiologic APN levels significantly enhanced acetylcholine (ACh)-induced vasorelaxation (P<0.01), an endothelium-dependent and nitric oxide (NO)-mediated process. Knockout of adiponectin receptor 1 (AdipoR1) or caveolin-1 (Cav-1, a cell signaling facilitating molecule), but not adiponectin receptor 2 (AdipoR2) abolished APN-enhanced ACh-induced vasorelaxation. Immunoblot assay revealed APN promoted the AdipoR1/Cav1 signaling complex in human endothelial cells. Treatment of HUVECs with physiologic APN concentrations caused significant eNOS phosphorylation and nitric oxide (NO) production (P<0.01), an effect abolished in knockdown of either AdipoR1 or Cav-1. Taken together, these data demonstrate for the first time physiologic APN levels enhance the vasorelaxative response to ACh by inducing NO production through AdipoR1/Cav-1 mediated signaling. In physiologic conditions, APN plays an important function of maintaining vascular tone.