Adiponectin is an adipose-derived hormone that plays an important role in maintaining energy homeostasis. Adiponectin gene expression is diminished in both obesity and type 2 diabetes. However, the mechanism underlying the impaired adiponectin gene expression remains poorly understood. Recent studies have indicated that forkhead transcription factor O1 (Foxo1) and silent information regulator 2 mammalian ortholog SIRT1 are involved in adipogenesis. Here we have shown that Foxo1 up-regulates adiponectin gene transcription through a Foxo1-responsive region in the mouse adiponectin promoter that contains two adjacent Foxo1 binding sites. Foxo1 interacts with CCAAT/enhancer-binding protein alpha (C/EBPalpha) to form a transcription complex at the mouse adiponectin promoter and up-regulates adiponectin gene transcription. Our study has revealed that C/EBPalpha accesses the adiponectin promoter through two Foxo1 binding sites and acts as a co-activator. Further, SIRT1 increases adiponectin transcription in adipocytes by activating Foxo1 and enhancing Foxo1 and C/EBPalpha interaction. Importantly, both Foxo1 and SIRT1 protein levels were significantly lower in epididymal fat tissues from db/db and high fat diet-induced obese mice compared with normal mice. We propose that low expression of SIRT1 and Foxo1 leads to impaired Foxo1-C/EBPalpha complex formation, which contributes to the diminished adiponectin expression in obesity and type 2 diabetes.