Adipocyte-specific secretory factor (ADSF)͞resistin is a small cysteinerich protein secreted from adipose tissue that belongs to a gene family found in inflammatory zone (FIZZ) or found in resistin-like molecule (RELM). ADSF has been implicated in modulating adipogenesis and insulin resistance. To examine the long-term function of ADSF in adipogenesis and glucose homeostasis, we constructed an expression vector for a dominant inhibitory form of ADSF by fusing it to the human IgG␥ constant region (hFc). ADSF-hFc not only homodimerizes but heterooligomerizes with ADSF͞resistin and prevents ADSF͞resis-tin inhibition of adipocyte differentiation of 3T3-L1 cells in a dominant negative manner. Transgenic mice overexpressing ADSF-hFc in adipose tissue show increased adiposity with elevated expression of adipocyte markers as well as enlarged adipocyte size. This finding clearly demonstrates in vivo the inhibitory role of ADSF in adipogenesis. ADSF-hFc transgenic mice with impaired ADSF function exhibit improved glucose tolerance and insulin sensitivity either on chow or high-fat diets. Because of the enhanced adipocyte differentiation, the ADSF-hFc transgenic mice show increased expression of leptin and adiponectin in adipose tissue. The elevated circulating levels for these adipocyte-derived hormones with decreased plasma triglyceride and free fatty acid levels may account for the improved glucose and insulin tolerance in these transgenic mice.O besity is a prevalent health hazard in industrialized countries and is closely associated with insulin resistance and type 2 diabetes. Obesity arises from increased size of adipocytes caused by lipid accumulation and from an increased number of adipocytes arising from differentiation of adipose precursor cells to mature adipocytes under the appropriate nutritional and hormonal conditions (1). Gene expression studies during adipocyte differentiation have firmly established that peroxisome proliferator-activated receptor ␥ (PPAR␥) and the CCAAT enhancer-binding protein (C͞EBP) family of transcription factors play central roles in adipocyte differentiation (2, 3). However, various factors in cell-cell and cell-matrix communications govern expression of the adipocyte transcription factors and therefore regulate conversion of preadipocytes to adipocytes (4). Although adipose tissue serves as the major energy reservoir in higher eukaryotes, the role of adipose tissue as a secretory organ has emerged through the discovery of leptin (5). In addition to leptin, other secretory factors including adiponectin and tumor necrosis factor ␣, as well as preadipocytespecific preadipocyte factor 1 (Pref-1) are known to be secreted from adipose tissue (6-8). These factors are involved in regulating a variety of physiological functions including satiety and energy metabolism, as well as adipocyte differentiation. In this regard, we have shown that Pref-1, which is secreted specifically by preadipocytes, inhibits adipocyte differentiation (8-10).We previously identified adipocyte-specific secretory ...