Adiponectin (Ad) is linked to various disease states and mediates antidiabetic and anti-inflammatory effects. While it was originally thought that Ad expression was limited to adipocytes, we demonstrate here that Ad is expressed in mouse skeletal muscles and within differentiated L6 myotubes, as assessed by RT-PCR, Western blot, and immunohistochemical analyses. Serial muscle sections stained for fiber type, lipid content, and Ad revealed that muscle fibers with elevated intramyocellular Ad expression were consistently type IIA and IID fibers with detectably higher intramyocellular lipid (IMCL) content. To determine the effect of Ad on muscle phenotype and function, we used an Ad-null [knockout (KO)] mouse model. Body mass increased significantly in 24-wk-old KO mice [+5.5 ± 3% relative to wild-type mice (WT)], with no change in muscle mass observed. IMCL content was significantly increased (+75.1 ± 25%), whereas epididymal fat mass, although elevated, was not different in the KO mice compared with WT (+35.1 ± 23%; P = 0.16). Fiber-type composition was unaltered, although type IIB fiber area was increased in KO mice (+25.5 ± 6%). In situ muscle stimulation revealed lower peak tetanic forces in KO mice relative to WT (−47.5 ± 6%), with no change in low-frequency fatigue rates. These data demonstrate that the absence of Ad expression causes contractile dysfunction and phenotypical changes in skeletal muscle. Furthermore, we demonstrate that Ad is expressed in skeletal muscle and that its intramyocellular localization is associated with elevated IMCL, particularly in type IIA/D fibers.