Obesity and type 2 diabetes have reached epidemic levels and account for a substantial portion of the annual health expenditures of developed nations. While there is an abundance of epidemiological evidence demonstrating that obesity is a primary risk factor for developing type 2 diabetes, the mechanism(s) underlying this linkage are not completely understood. Given the enormous impact of these disorders on global health, considerable research effort has been devoted to elucidate the pathophysiological relationship between these two disorders. Two factors believed to contribute to the causal link between obesity and type 2 diabetes are chronic inflammation and altered secretion of adipose-derived signaling molecules (adipokines). Independent lines of investigation have implicated the novel adipokine chemerin as a regulator of adipogenesis, inflammation, and glucose metabolism through interactions with the cognate cell surface receptor chemokine-like receptor 1. Increased levels of chemerin that occur with obesity are hypothesized to be a causal factor in the development of type 2 diabetes as a consequence of dysregulation of the key physiological processes regulated by this adipokine. This review summarizes current research on the biological roles of chemerin and chemokine-like receptor 1, and highlights key questions to guide future research on the role of this adipokine in mediating obesity and the development of type 2 diabetes.