Adiponectin is a plasma protein exclusively secreted from fat tissue. Many recent pharmacological studies suggest that recombinant adiponectin has multiple therapeutic potentials for obesity-related metabolic disorders, including type 2 diabetes, dyslipidemia, insulin resistance and atherosclerosis. However, the physiological relevance of these findings remains to be further established. In the present study, we have purified endogenous adiponectin from fetal bovine serum and characterized its post-translational modifications and physiological functions in animal models. Endogenous bovine serum adiponectin consists predominantly of full-length proteins that form multiple oligomeric complexes, including trimers, hexamers and higher molecular species. Two-dimensional gel electrophoresis revealed that bovine serum adiponectin exists as multiple post-translationally modified isoforms with distinct molecular weight and isoelectric point. Further analysis using mass spectrometry and Edman degradation sequencing demonstrated that five conserved lysine residues (Lys 28, 60, 63, 72 and 96) within the collagenous domain of bovine adiponectin are hydroxylated and glycosylated by a glucosyl alpha(1-2)galactosyl group. Injection of endogenous bovine adiponectin into C57 mice potently decreased circulating glucose levels and enhanced lipid clearance after a high fat meal. Chronic administration of this protein for a period of two weeks significantly increased insulin sensitivity and glucose tolerance, and depleted hepatic lipid accumulation in high-fat fed mice. These results provide direct evidence that endogenous bovine adiponectin is a physiological hormone that can regulate lipid and glucose metabolism.