This study aims to identify the potential mechanisms by which perivascular adipose tissue (PVAT) reduces tone in small arteries. Small mesenteric arteries from wild-type and large-conductance Ca(2+)-activated K(+) (BKCa) channel knockout mice were mounted on a wire myograph in the presence and absence of PVAT, and contractile responses to norepinephrine were assessed. Electrophysiology studies were performed in isolated vessels to measure changes in membrane potential produced by adiponectin. Contractile responses from wild-type mouse small arteries were significantly reduced in the presence of PVAT. This was not observed in the presence of a BKCa channel inhibitor or with nitric oxide synthase (NOS) inhibition or in BKCa or adiponectin knockout mice. Solution transfer experiments demonstrated the presence of an anticontractile factor released from PVAT. Adiponectin-induced vasorelaxation and hyperpolarization in wild-type arteries were not evident in the absence of or after inhibition of BKCa channels. PVAT from BKCa or adiponectin knockout mice failed to elicit an anticontractile response in wild-type arteries. PVAT releases adiponectin, which is an anticontractile factor. Its effect on vascular tone is mediated by activation of BKCa channels on vascular smooth muscle cells and adipocytes and by endothelial mechanisms.