Insulin resistance plays a major role in the development of type 2 diabetes and may be causally associated with increased intracellular fat content. Transgenic mice with adipocyte-specific overexpression of FOXC2 (forkhead transcription factor) have been generated and shown to be protected against diet-induced obesity and glucose intolerance. To understand the underlying mechanism, we examined the effects of chronic high-fat feeding on tissue-specific insulin action and glucose metabolism in the FOXC2 transgenic (Tg) mice. Whole-body fat mass were significantly reduced in the FOXC2 Tg mice fed normal diet or high-fat diet compared with the wild-type mice. Diet-induced insulin resistance in skeletal muscle of the wild-type mice was associated with defects in insulin signaling and significant increases in intramuscular fatty acyl CoA levels. In contrast, FOXC2 Tg mice were completely protected from diet-induced insulin resistance and intramuscular accumulation of fatty acyl CoA. High-fat feeding also blunted insulin-mediated suppression of hepatic glucose production in the wild-type mice, whereas FOXC2 Tg mice were protected from diet-induced hepatic insulin resistance. These findings demonstrate an important role of adipocyte-expressed FOXC2 on whole-body glucose metabolism and further suggest FOXC2 as a novel therapeutic target for the treatment of insulin resistance and type 2 diabetes.