Since evidence has appeared that tumor necrosis factor-alpha (TNF) is involved in the loss of body fat in the course of wasting diseases, a large number of studies have investigated the physiological role of this cytokine in adipose tissue. TNF treatment of several in vitro models of adipogenesis clearly showed that TNF is a potent inhibitor of adipose differentiation. This antiadipogenic property is accompanied by suppression of developmental and metabolic markers of fat cell differentiation, such as peroxisome proliferator-activated receptor (PPAR)-gamma2, lipoprotein lipase (LPL), glycerol-3-phosphate dehydrogenase (GPDH) and GLUT4. Moreover, TNF promotes lipolysis in mature adipocytes and, subsequently, a reversion of the adipocyte phenotype. Recent studies demonstrated that TNF directly interferes with the insulin signaling cascade at early steps and, thus, impairs insulin-stimulated glucose transport. Further progress in understanding the role of TNF in adipose tissue was made when endogenous TNF mRNA expression was demonstrated in adipose tissue. Obesity was found to represent a state of overexpression of the TNF system. Such findings support the hypothesis that TNF is a mediator of obesity-linked insulin resistance. However, this concept is mainly based on animal data and is so far only partially supported by studies in humans. Taken together, the results of a variety of experimental and clinical studies suggest that TNF may act as an important auto/paracrine regulator of fat cell function which serves to limit adipose tissue expansion, probably by inducing insulin resistance which may in turn cause metabolic disturbances. Elucidation of the molecular mechanisms of TNF production and action in adipose tissue may help to find new approaches for the treatment of insulin resistance in humans.