The major glucocorticoid in man, cortisol, plays important roles in regulating fuel metabolism, energy partitioning and body fat distribution. In addition to the control of cortisol levels in blood by the hypothalamic-pituitary-adrenal axis, intracellular cortisol levels within target tissues can be controlled by local enzymes. 11β-Hydroxysteroid dehydrogenase type 1 (11β-HSD1) catalyses the regeneration of active cortisol from inert cortisone, thereby amplifying cortisol levels and glucocorticoid receptor activation in adipose tissue, liver and other tissues. 11β-HSD1 is under complex tissue-specific regulation and there is evidence that it adjusts local cortisol concentrations independently of the plasma cortisol concentrations, e.g. in response to changes in diet. In obesity 11β-HSD1 mRNA and activity in adipose tissue are increased. The mechanism of this up-regulation remains uncertain; polymorphisms in the HSD11B1 gene have been associated with metabolic complications of obesity, including hypertension and type 2 diabetes, but not with obesity per se. Extensive data have been obtained in mice with transgenic over-expression of 11β-HSD1 in liver and adipocytes, targeted deletion of 11β-HSD1, and using novel selective 11β-HSD1 inhibitors; these data support the use of 11β-HSD1 inhibitors to lower intracellular glucocorticoid levels and treat both obesity and its metabolic complications. Moreover, in human subjects the non-selective ‘prototype’ inhibitor carbenoxolone enhances insulin sensitivity. Results of clinical studies with novel potent selective 11β-HSD1 inhibitors are therefore eagerly awaited. The present article focuses on the physiological role of glucocorticoids in regulating energy partitioning, and the evidence that this process is modulated by 11β-HSD1 in human subjects.