Endocrine effects of adipose-derived adiponectin on skeletal muscle have been shown to account, at least in part, for the anti-diabetic effects of this adipokine. Recently, the concept of myokines has gained credence and the potential for skeletal muscle to produce adiponectin has been suggested. Here we demonstrated an increased level of adiponectin mRNA and protein expression as well as protein secretion in response to rosiglitazone treatment in L6 muscle cells. This correlated with the ability of rosiglitazone to enhance insulin sensitivity for stimulation of Akt phosphorylation and glucose transport, rosiglitazone also corrected high glucose (HG) induced insulin resistance in L6 cells. Overexpression of adiponectin confirmed the functional significance of local production of adiponectin in muscle cells via elevated glucose uptake and increased insulin sensitivity. In obese diabetic db/db mice there was a change in the adiponectin expression profile in soleus and extensor digitorum longus (EDL) muscle with less HMW and more MMW/LMW species detected. Induction of obesity and insulin resistance in rats by feeding a high fat high sucrose diet also led to decreased muscle HMW adiponectin content which could be corrected by rosiglitazone treatment. In summary, we show the ability of skeletal muscle cells to produce adiponectin which can mediate autocrine metabolic effects, thus establishing adiponectin as a bona fide myokine. We also demonstrate that skeletal muscle adiponectin production is altered in animal models of obesity and diabetes and that these changes can be corrected by rosiglitazone.