OBJECTIVE: Oxidative stress is associated with insulin resistance and is thought to contribute to progression toward type 2 diabetes. Oxidation induces cellular damages through increased amounts of reactive aldehydes from lipid peroxidation. The aim of our study was to investigate 1) the effect of the major lipid peroxidation end product, 4-hydroxynonenal (HNE), on insulin signaling in 3T3-L1 adipocytes, and 2) whether fatty aldehyde dehydrogenase (FALDH), which detoxifies HNE, protects cells and improves insulin action under oxidative stress conditions. RESEARCH DESIGN AND METHODS: 3T3-L1 adipocytes were exposed to HNE and/or infected with control adenovirus or adenovirus expressing FALDH. RESULTS: Treatment of 3T3-L1 adipocytes with HNE at nontoxic concentrations leads to a pronounced decrease in insulin receptor substrate (IRS)-1/-2 proteins and in insulin-induced IRS and insulin receptor beta (IR beta) tyrosine phosphorylation. Remarkably, we detect increased binding of HNE to IRS-1/-2-generating HNE-IRS adducts, which likely impair IRS function and favor their degradation. Phosphatidylinositol 3-kinase and protein kinase B activities are also downregulated upon HNE treatment, resulting in blunted metabolic responses. Moreover, FALDH, by reducing adduct formation, partially restores HNE-generated decrease in insulin-induced IRS-1 tyrosine phosphorylation and metabolic responses. Moreover, rosiglitazone could have an antioxidant effect because it blocks the noxious HNE action on IRS-1 by increasing FALDH gene expression. Collectively, our data show that FALDH improves insulin action in HNE-treated 3T3-L1 adipocytes. CONCLUSION: Oxidative stress induced by reactive aldehydes, such as HNE, is implicated in the development of insulin resistance in 3T3-L1 adipocytes, which is alleviated by FALDH. Hence, detoxifying enzymes could play a crucial role in blocking progression of insulin resistance to diabetes.