Adipose tissue hypoxia and inflammation have been causally implicated in obesity-induced insulin resistance. Here, we report that, early in the course of high-fat diet (HFD) feeding and obesity, adipocyte respiration becomes uncoupled, leading to increased oxygen consumption and a state of relative adipocyte hypoxia. These events are sufficient to trigger HIF-1α induction, setting off the chronic adipose tissue inflammatory response characteristic of obesity. At the molecular level, these events involve saturated fatty acid stimulation of the adenine nucleotide translocase 2 (ANT2), an inner mitochondrial membrane protein, which leads to the uncoupled respiratory state. Genetic or pharmacologic inhibition of either ANT2 or HIF-1α can prevent or reverse these pathophysiologic events, restoring a state of insulin sensitivity and glucose tolerance. These results reveal the sequential series of events in obesity-induced inflammation and insulin resistance.