The adverse metabolic consequences of obesity are best predicted by the quantity of visceral fat. Excess glucocorticoids produce visceral obesity and diabetes, but circulating glucocorticoid levels are normal in typical obesity. Glucocorticoids can be produced locally from inactive 11-keto forms through the enzyme 11β hydroxysteroid dehydrogenase type 1 (11β HSD-1). We created transgenic mice overexpressing 11β HSD-1 selectively in adipose tissue to an extent similar to that found in adipose tissue from obese humans. These mice had increased adipose levels of corticosterone and developed visceral obesity that was exaggerated by a high-fat diet. The mice also exhibited pronounced insulin-resistant diabetes, hyperlipidemia, and, surprisingly, hyperphagia despite hyperleptinemia. Increased adipocyte 11β HSD-1 activity may be a common molecular etiology for visceral obesity and the metabolic syndrome.