Adipose tissue is now recognized as an important endocrine organ, capable of secreting a large number of endocrine factors which regulate a wide variety of physiological functions. Adiponectin is one such factor, secreted in large quantities primarily from adipose tissue. Adiponectin is posttranslationally modified from a 30-kDa monomeric protein into different multimers (low molecular weight or trimer, middle molecular weight or hexamer, and high molecular weight) and secreted into the circulation. Upon binding to its receptors, AdipoR1 and R2, adiponectin initiates a series of tissue-dependent signal transduction events, including phosphorylation of adenosine monophosphate (AMPK) and p38 mitogen-activated protein kinase (p38 MAPK), and increased peroxisome proliferator-activated receptor alpha (PPARα) ligand activity. These signal transduction events are regulated by adaptor protein containing a pleckstrin homology domain, phosphotyrosine binding domain, and leucine zipper motif (APPL1), which binds directly to the intracellular regions of AdipoR1 and R2. AdipoR1 and R2 also possesses inherent ceramidase activity, resulting in a decrease in intracellular ceramide, a sphingolipid that has been implicated in insulin resistance, cell death, inflammation, and atherosclerosis. Adiponectin stimulates fatty acid oxidation in skeletal muscle and inhibits glucose production in the liver, resulting in an improvement in whole-body energy homeostasis. Adiponectin is also a classic anti-inflammatory agent, reducing inflammation in various cell types through AdipoR1 and R2 signaling mechanisms. Adiponectin's anti-inflammatory and anti-apoptotic properties results in protection of the vasculature, heart, lung, and colon. In this review, we provide a comprehensive overview of the discovery, protein structure, receptors, expression, regulation, and physiological functions of adiponectin. © 2017 American Physiological Society. Compr Physiol 8:1031-1063, 2018.