Diabetes mellitus is a major health concern, affecting more than 5% of the population. Here we describe a potential novel therapeutic agent for this disease, FGF-21, which was discovered to be a potent regulator of glucose uptake in mouse 3T3-L1 and primary human adipocytes. FGF-21-transgenic mice were viable and resistant to diet-induced obesity. Therapeutic administration of FGF-21 reduced plasma glucose and triglycerides to near normal levels in both ob/ob and db/db mice. These effects persisted for at least 24 hours following the cessation of FGF-21 administration. Importantly, FGF-21 did not induce mitogenicity, hypoglycemia, or weight gain at any dose tested in diabetic or healthy animals or when overexpressed in transgenic mice. Thus, we conclude that FGF-21, which we have identified as a novel metabolic factor, exhibits the therapeutic characteristics necessary for an effective treatment of diabetes.