The fat mass participates in the regulation of glucose and insulin metabolism through the release of adipocytokines in a mechanism called the adipoinsular axis. Putative adipocytokines include leptin, adiponectin and resistin. Obesity plays an important role in the pathogenesis of insulin resistance and type 2 diabetes mellitus (T2DM). Bariatric surgery for morbidly obese patients leads to rapid and prolonged improvement in insulin resistance and T2DM in the vast majority of patients. We have previously proposed that the rapid improvement in insulin resistance observed following bariatric surgery is mediated by changes in incretin levels of the entero-insular axis and that long-term improvement is modulated by fat mass loss and changes in adipocytokine levels of the adipoinsular axis. In this review, we examine the information that supports a role of leptin, adiponectin and resistin in the development of insulin resistance and T2DM. Increasing levels of leptin and decreasing levels of adiponectin correlate with worsening insulin resistance in obese individuals. We also explore the relationship between changes in adipocytokines following bariatric surgery and long-term improvement in insulin resistance and T2DM. Leptin levels drop and adiponectin levels rise following laparoscopic adjustable gastric banding, gastric bypass and biliopancreatic diversion. These changes correlate with weight loss and improvement in insulin. Although resistin may play an important role in explaining insulin resistance, animal and human studies currently show conflicting results.