Adiponectin is strongly inversely associated with insulin resistance and type 2 diabetes, but its causal role remains controversial. We used a Mendelian randomization approach to test the hypothesis that adiponectin causally influences insulin resistance and type 2 diabetes. We used genetic variants at the ADIPOQ gene as instruments to calculate a regression slope between adiponectin levels and metabolic traits (up to 31,000 individuals) and a combination of instrumental variables and summary statistics-based genetic risk scores to test the associations with gold-standard measures of insulin sensitivity (2,969 individuals) and type 2 diabetes (15,960 case subjects and 64,731 control subjects). In conventional regression analyses, a 1-SD decrease in adiponectin levels was correlated with a 0.31-SD (95% CI 0.26-0.35) increase in fasting insulin, a 0.34-SD (0.30-0.38) decrease in insulin sensitivity, and a type 2 diabetes odds ratio (OR) of 1.75 (1.47-2.13). The instrumental variable analysis revealed no evidence of a causal association between genetically lower circulating adiponectin and higher fasting insulin (0.02 SD; 95% CI -0.07 to 0.11; N = 29,771), nominal evidence of a causal relationship with lower insulin sensitivity (-0.20 SD; 95% CI -0.38 to -0.02; N = 1,860), and no evidence of a relationship with type 2 diabetes (OR 0.94; 95% CI 0.75-1.19; N = 2,777 case subjects and 13,011 control subjects). Using the ADIPOQ summary statistics genetic risk scores, we found no evidence of an association between adiponectin-lowering alleles and insulin sensitivity (effect per weighted adiponectin-lowering allele: -0.03 SD; 95% CI -0.07 to 0.01; N = 2,969) or type 2 diabetes (OR per weighted adiponectin-lowering allele: 0.99; 95% CI 0.95-1.04; 15,960 case subjects vs. 64,731 control subjects). These results do not provide any consistent evidence that interventions aimed at increasing adiponectin levels will improve insulin sensitivity or risk of type 2 diabetes.