Adipokines play important roles in metabolic homeostasis and disease. We have recently identified a novel adipokine Metrnl, also known as Subfatin, for its high expression in subcutaneous fat. Here, we demonstrate a prodifferentiation action of Metrnl in white adipocytes. Adipocyte-specific knockout of Metrnl exacerbates insulin resistance induced by high-fat diet (HFD), whereas adipocyte-specific transgenic overexpression of Metrnl prevents insulin resistance induced by HFD or leptin deletion. Body weight and adipose content are not changed by adipocyte Metrnl. Consistently, no correlation is found between serum Metrnl level and BMI in humans. Metrnl promotes white adipocyte differentiation, expandability, and lipid metabolism and inhibits adipose inflammation to form functional fat, which contributes to its activity against insulin resistance. The insulin sensitization of Metrnl is blocked by PPARγ inhibitors or knockdown. However, Metrnl does not drive white adipose browning. Acute intravenous injection of recombinant Metrnl has no hypoglycemic effect, and 1-week intravenous administration of Metrnl is unable to rescue insulin resistance exacerbated by adipocyte Metrnl deficiency. Our results suggest adipocyte Metrnl controls insulin sensitivity at least via its local autocrine/paracrine action through the PPARγ pathway. Adipocyte Metrnl is an inherent insulin sensitizer and may become a therapeutic target for insulin resistance.