Adipocytes produce a variety of molecules that are capable of functioning in both a paracrine and autocrine fashion. Tumor necrosis factor (TNF) is one of the proteins produced by adipocytes that has been shown to regulate adipocyte function. Interestingly, adipocyte expression of TNF increases with increasing adipocyte mass and expression of TNF is increased in adipocytes isolated from several genetic models of rodent obesity and from obese humans. This finding has led to the idea that TNF produced by adipocytes functions as a local "adipostat" to limit fat accumulation. Increased production of TNF by adipocytes, however, may contribute to insulin resistance in obesity and in non-insulin-dependent diabetes mellitus (NIDDM). TNF has been shown to inhibit insulin-simulated tyrosine phosphorylation of both the insulin receptor (IR) and insulin receptor substrate (IRS)-1 and to stimulate downregulation of the insulin-sensitive glucose transporter, GLUT4, in adipocytes. These findings raise the possibility that pharmacological inhibition of TNF may provide a novel therapeutic target to treat patients with NIDDM.