The metabolic syndrome (visceral obesity, insulin resistance, type 2 diabetes, and dyslipidemia) resembles Cushing's Syndrome, but without elevated circulating glucocorticoid levels. An emerging concept suggests that the aberrantly elevated levels of the intracellular glucocorticoid reamplifying enzyme 11 beta-hydroxysteroid dehydrogenase type 1 (11 beta-HSD-1) found in adipose tissue of obese humans and rodents underlies the phenotypic similarities between idiopathic and "Cushingoid" obesity. Transgenic overexpression of 11 beta-HSD-1 in adipose tissue reproduces a metabolic syndrome in mice, whereas 11 beta-HSD-1 deficiency or inhibition has beneficial metabolic effects, at least on liver metabolism. Here we report novel protective effects of 11 beta-HSD-1 deficiency on adipose function, distribution, and gene expression in vivo in 11 beta-HSD-1 nullizygous (11 beta-HSD-1(-/-)) mice. 11 beta-HSD-1(-/-) mice expressed lower resistin and tumor necrosis factor-alpha, but higher peroxisome proliferator-activated receptor-gamma, adiponectin, and uncoupling protein-2 mRNA levels in adipose, indicating insulin sensitization. Isolated 11 beta-HSD-1(-/-) adipocytes exhibited higher basal and insulin-stimulated glucose uptake. 11 beta-HSD-1(-/-) mice also exhibited reduced visceral fat accumulation upon high-fat feeding. High-fat-fed 11 beta-HSD-1(-/-) mice rederived onto the C57BL/6J strain resisted diabetes and weight gain despite consuming more calories. These data provide the first in vivo evidence that adipose 11 beta-HSD-1 deficiency beneficially alters adipose tissue distribution and function, complementing the reported effects of hepatic 11 beta-HSD-1 deficiency or inhibition.