Adipose tissue hypoxia is an early phenotype in obesity, associated with macrophage infiltration and local inflammation. Here we test the hypothesis that adipocytes in culture respond to a hypoxic environment with the release of pro-inflammatory factors that stimulate macrophage migration and cause muscle insulin resistance. 3T3-L1 adipocytes cultured in a 1% O 2 atmosphere responded with a classic hypoxia response by elevating protein expression of HIF-1α. This was associated with elevated mRNA expression and peptide release of cytokines TNFα, IL-6 and the chemokine monocyte chemoattractant protein-1 (MCP-1). The mRNA and protein expression of the anti-inflammatory adipokine adiponectin was reduced. Conditioned medium from hypoxia-treated adipocytes (CM-H), inhibited insulin-stimulated and raised basal cell surface levels of GLUT4 myc stably expressed in C2C12 myotubes. Insulin stimulation of Akt and AS160 phosphorylation, key regulators of GLUT4 myc exocytosis, was markedly impaired. CM-H also caused activation of JNK and S6K, and elevated serine phosphorylation of IRS1 in the C2C12 myotubes. These effects were implicated in reducing propagation of insulin signaling to Akt and AS160. Heat inactivation of CM-H reversed its dual effects on GLUT4 myc traffic in muscle cells. Interestingly, antibody-mediated neutralization of IL-6 in CM-H lowered its effect on both the basal and insulin-stimulated cell surface GLUT4 myc compared to unmodified CM-H. IL-6 may have regulated GLUT4 myc traffic through its action on AMPK. Additionally, antibody-mediated neutralization of MCP-1 partly reversed the inhibition of insulin-stimulated GLUT4 myc exocytosis caused by unmodified CM-H. In Transwell co-culture, hypoxia-challenged adipocytes attracted RAW 264.7 macrophages, consistent with elevated release of MCP-1 from adipocytes during hypoxia. Neutralization of MCP-1 in adipocyte CM-H prevented macrophage migration towards it and partly reversed the effect of CM-H on insulin response in muscle cells. We conclude that adipose tissue hypoxia may be an important trigger of its inflammatory response observed in obesity, and the elevated chemokine MCP-1 may contribute to increased macrophage migration towards adipose tissue and subsequent decreased insulin responsiveness of glucose uptake in muscle.