Cigarette smoking promotes body weight reduction in humans while paradoxically also promoting insulin resistance (IR) and hyperinsulinemia. However, the mechanisms behind these effects are unclear. Here we show that nicotine, a major constituent of cigarette smoke, selectively activates AMP-activated protein kinase α2 (AMPKα2) in adipocytes, which in turn phosphorylates MAP kinase phosphatase-1 (MKP1) at serine 334, initiating its proteasome-dependent degradation. The nicotine-dependent reduction of MKP1 induces the aberrant activation of both p38 mitogen-activated protein kinase and c-Jun N-terminal kinase, leading to increased phosphorylation of insulin receptor substrate 1 (IRS1) at serine 307. Phosphorylation of IRS1 leads to its degradation, protein kinase B inhibition, and the loss of insulin-mediated inhibition of lipolysis. Consequently, nicotine increases lipolysis, which results in body weight reduction, but this increase also elevates the levels of circulating free fatty acids and thus causes IR in insulin-sensitive tissues. These results establish AMPKα2 as an essential mediator of nicotine-induced whole-body IR in spite of reductions in adiposity.