Mitochondrial dysfunction and endoplasmic reticulum (ER) stress are considered the key determinants of insulin resistance. Impaired mitochondrial function in obese animals was shown to induce the ER stress response, resulting in reduced adiponectin synthesis in adipocytes. The expression of inducible nitric oxide synthase (iNOS) is increased in adipose tissues in genetic and dietary models of obesity. In this study, we examined whether activation of iNOS is responsible for palmitate-induced mitochondrial dysfunction, ER stress, and decreased adiponectin synthesis in 3T3L1 adipocytes. As expected, palmitate increased the expression levels of iNOS and ER stress response markers, and decreased mitochondrial contents. Treatment with iNOS inhibitor increased adiponectin synthesis and reversed the palmitate-induced ER stress response. However, the iNOS inhibitor did not affect the palmitate-induced decrease in mitochondrial contents. Chemicals that inhibit mitochondrial function increased iNOS expression and the ER stress response, whereas measures that increase mitochondrial biogenesis (rosiglitazone and adenoviral overexpression of nuclear respiratory factor-1) reversed them. Inhibition of mitochondrial biogenesis prevented the rosiglitazone-induced decrease in iNOS expression and increase in adiponectin synthesis. These results suggest that palmitate-induced mitochondrial dysfunction is the primary event that leads to iNOS induction, ER stress, and decreased adiponectin synthesis in cultured adipocytes.