The pathophysiology of obesity and type 2 diabetes in rodents and humans is characterized by low-grade inflammation in adipose tissue and liver. The CD40 receptor and its ligand, CD40L, initiate immune cell signaling promoting inflammation, but conflicting data on CD40L null mice confound its role in obesity-associated insulin resistance. Here we demonstrate that CD40 receptor deficient mice on a high fat diet display the expected decrease in hepatic cytokine levels, but paradoxically exhibit liver steatosis, insulin resistance and glucose intolerance compared to their age-matched wild type controls. Hyperinsulinemic-euglycemic clamp studies also demonstrated insulin resistance in glucose utilization by the CD40 null mice compared to wild type mice. In contrast to liver, adipose tissue in CD40 deficient animals harbors elevated cytokine levels and infiltration of inflammatory cells, particularly macrophages and CD8+ effector T-cells. In addition, ex vivo explants of epididymal adipose tissue from CD40(-/-) mice display elevated basal and isoproterenol-stimulated lipolysis, suggesting a potential increase of lipid efflux from visceral fat to the liver. These findings reveal that, 1) CD40 null mice represent an unusual model of hepatic steatosis with reduced hepatic inflammation, and 2) CD40 unexpectedly functions in adipose tissue to attenuate its inflammation in obesity, thereby protecting against hepatic steatosis.