Aims: Adiponectin is an important adipokine whose levels are decreased in obesity despite increases in adipocyte mass. Studies in animal models implicate adiponectin as an insulin sensitizer in skeletal muscle and liver. Thiazolidinediones (TZDs) are insulin sensitizers and ligands for peroxisome proliferator-activated γ receptors (PPARγ) and these receptors are expressed in β cells where their activation promotes cell survival. We hypothesize that adiponectin promotes β cell survival by activating PPARγ. Methods: We used MIN6 cells to investigate the effect of adiponectin on PPARγ expression, β-cell proliferation, insulin synthesis and insulin secretion. Results: We demonstrate that MIN6 cells contain adiponectin receptors and that adiponectin activates PPARγ mRNA and protein expression. This increase in PPARγ expression is blocked by the PPARγ antagonist, GW9662, indicating a transcriptional feedback loop involving PPARγ activation of itself. Adiponectin causes a significant increase in insulin content and secretion and this occurs also via PPARγ activation due to the inhibitory effect of GW9662. Adiponectin also promotes MIN6 cell proliferation, however, this effect is independent of PPARγ activation. Conclusions: Our results identify novel roles for the adipokine, adiponectin, in β-cells function. Adiponectin upregulates PPARγ expression, insulin content and insulin secretion through PPARγ-dependent mechanisms. Reductions in circulating adiponectin levels in obese individuals could therefore result in negative effects on β-cell function and this may have direct relevance to β-cell dysfunction in type 2 diabetes.