Overactivity of the endocannabinoid system (ECS) has been linked to abdominal obesity and other risk factors for cardiovascular disease and type 2 diabetes. Conversely, administration of cannabinoid receptor type 1 (CB1) antagonists reduces adiposity in obese animals and humans. This effect is only in part secondary to the anorectic action of CB1 agonists. In order to assess the actions of CB1 antagonism on glucose homeostasis, diet-induced obese (DIO) rats received the CB1 antagonist rimonabant (10 mg/kg, intraperitoneally (IP)) or its vehicle for 4 weeks, or were pair-fed to the rimonabant-treated group for the same length of time. Rimonabant treatment transiently reduced food intake, while inducing body weight loss throughout the study. Rats receiving rimonabant had significantly less body fat and circulating leptin compared to both vehicle and pair-fed groups. Rimonabant, but not pair-feeding, also significantly decreased circulating nonesterified fatty acid (NEFA) and triacylglycerol (TG) levels, and reduced TG content in oxidative skeletal muscle. Although no effects were observed during a glucose tolerance test (GTT), rimonabant restored insulin sensitivity to that of chow-fed, lean controls during an insulin tolerance test (ITT). Conversely, a single dose of rimonabant to DIO rats had no acute effect on insulin sensitivity. These findings suggest that in diet-induced obesity, chronic CB1 antagonism causes weight loss and improves insulin sensitivity by diverting lipids from storage toward utilization. These effects are independent of the anorectic action of the drug.