The objective of this brief report was to study the effect of adipose tissue (AT) hypoxia on the antilipolytic effect of insulin. The sample study included 21 lean and obese individuals. Results showed that the ability of insulin to suppress lipolysis was defective in subjects with a low AT oxygen partial pressure (ATpO2), and impaired lipolysis was also associated with low AT capillary density and low vascular endothelial growth factor (VEGF) mRNA. The observed reduction in AT VEGF and capillary rarefaction suggest that the reduced ATpO2 does not elicit an angiogenic response. Therefore, these results suggest that low capillary density and ATpO2 in AT could initiate AT dysfunction in obesity and consequently induce AT insulin resistance.