Adipose tissue secretes factors that control various physiological systems. The fall in leptin during fasting mediates hyperphagia and suppresses thermogenesis, thyroid and reproductive hormones, and immune system. On the other hand, rising leptin levels in the fed state stimulate fatty acid oxidation, decrease appetite, and limit weight gain. These divergent effects of leptin occur through neuronal circuits in the hypothalamus and other brain areas. Leptin also regulates the activities of enzymes involved in lipid metabolism, e.g., AMP-activated protein kinase and stearoyl-CoA desaturase-1, and also interacts with insulin signaling in the brain. Adiponectin enhances fatty acid oxidation and insulin sensitivity, in part by stimulating AMP-activated protein kinase phosphorylation and activity in liver and muscle. Moreover, adiponectin decreases body fat by increasing energy expenditure and lipid catabolism. These effects involve peripheral and possibly central mechanisms. Adipose tissue mediates interconversion of steroid hormones and secretes proinflammatory cytokines, vasoactive peptides, and coagulation and complement proteins. Understanding the actions of these "adipocytokines" will provide insight into the pathogenesis and treatment of obesity and related diseases.