Previous epidemiologic studies have suggested that periodontal disease is closely related to obesity and glucose tolerance. As the level of adiponectin, an adipocyte-derived cytokine, in plasma had been reported to decrease in obese and type 2 diabetes patients, we explored the role of adiponectin in the etiology of periodontitis using the D clone of RAW264, a clone that exhibits highly efficient osteoclast formation, to determine whether adiponectin acts as a regulatory molecule in osteoclast formation stimulated by lipopolysaccharide of periodontopathic bacteria. We observed that adiponectin acted as a potent inhibitor of osteoclast formation stimulated by Toll-like receptor 4 (TLR4) ligand and receptor activator of NF-κB ligand (RANKL). Because NF-κB is an important transcription factor in osteoclast formation, we examined the effect of adiponectin on its transcriptional activity. A luciferase assay showed that adiponectin was able to inhibit the TLR4-mediated NF-κB activity in RAW264 cells. In addition, we observed that the cytokine was actually able to inhibit TLR4-mediated expression of the gene for inducible nitric oxide synthase and production of nitric oxide in the cells. These observations strongly suggest that adiponectin may function as a negative regulator of lipopolysaccharide/RANKL-mediated osteoclast formation in periodontal disease.