It has recently been shown that the fat-derived hormone adiponectin has the ability to decrease hyperglycemia and to reverse insulin resistance. However, bacterially produced full-length adiponectin is functionally inactive. Here, we show that endogenous adiponectin secreted by adipocytes is post-translationally modified into eight different isoforms, as shown by two-dimensional gel electrophoresis. Carbohydrate detection revealed that six of the adiponectin isoforms are glycosylated. The glycosylation sites were mapped to several lysines (residues 68, 71, 80, and 104) located in the collagenous domain of adiponectin, each having the surrounding motif of GXKGE(D). These four lysines were found to be hydroxylated and subsequently glycosylated. The glycosides attached to each of these four hydroxylated lysines are possibly glucosylgalactosyl groups. Functional analysis revealed that full-length adiponectin produced by mammalian cells is much more potent than bacterially generated adiponectin in enhancing the ability of subphysiological concentrations of insulin to inhibit gluconeogenesis in primary rat hepatocytes, whereas this insulin-sensitizing ability was significantly attenuated when the four glycosylated lysines were substituted with arginines. These results indicate that full-length adiponectin produced by mammalian cells is functionally active as an insulin sensitizer and that hydroxylation and glycosylation of the four lysines in the collagenous domain might contribute to this activity.In addition to serving as an energy storage depot for triglycerides, adipose tissue is now recognized as an active endocrine organ that can secret a variety of biologically active molecules (adipocytokines) in response to extracellular signals (1-4). Some of these adipocytokines, such as leptin, tumor necrosis factor-␣, and resistin, have been shown to play critical roles in the regulation of systemic energy homeostasis, and altered expression and/or secretion of these adipocytokines may contribute to the causation of insulin resistance, type II diabetes, and its complications such as cardiovascular diseases.Adiponectin (also called ACRP30, adipoQ, and GBP28) is a protein exclusively secreted by adipocytes and was originally cloned by four research groups using different approaches (5-8). Several recent studies suggest that adiponectin might be a critical, long sought after hormone that links obesity, insulin resistance, and type II diabetes (9 -11). The adiponectin gene is located in chromosome 3q27, a susceptibility locus for type II diabetes and related metabolic syndromes (12-14). Circulating adiponectin is abundant in humans as well as rodents, with plasma circulating levels in the microgram/ml range, accounting for ϳ0.01% of the total plasma protein (15, 16). mRNA expression and the secretion level of adiponectin are dramatically decreased in a variety of animal models of insulin resistance as well as in obese humans and type II diabetic patients from different ethnic groups (15)(16)(17)(18)(19)(20). Notably, treatmen...