The virtually fatless A-ZIP/F-1 mouse is profoundly insulin resistant, diabetic, and a good model for humans with severe generalized lipoatrophy. Like a number of other mouse models of diabetes, the A-ZIP/F-1 mouse has elevated serum corticosterone levels. Leptin infusion lowers the corticosterone levels, suggesting that leptin deficiency contributes to the hypercorticosteronemic state. To test the hypothesis that the increased glucocorticoids contribute to the diabetes and insulin resistance, we examined the effect of adrenalectomy on A-ZIP/F-1 mice. Adrenalectomy significantly decreased the blood glucose, serum insulin, and glycated hemoglobin levels. Hyperinsulinemic-euglycemic clamps were performed to characterize the changes in whole-body and tissue insulin sensitivity. The adrenalectomized A-ZIP/F-1 mice displayed a marked improvement in insulin-induced suppression of endogenous glucose production, indicating increased hepatic insulin sensitivity. Adrenalectomy also increased muscle glucose uptake and glycogen synthesis. These results suggest that the chronically increased serum corticosterone levels contribute to the diabetes of the A-ZIP/F-1 mice and that removal of the glucocorticoid excess improves the insulin sensitivity in both muscle and liver.