|Mice carrying a targeted disruption of the prostaglandin E2 E-prostanoid receptor 3 (EP3) gene, Ptger3, were fed a high-fat diet (HFD), or a micronutrient matched control diet, to investigate the effects of disrupted PGE2-EP3 signaling on diabetes in a setting of diet induced obesity. While no differences in body weight were seen in mice fed the control diet, when fed a HFD, EP3-/- mice gained more weight relative to EP3+/+ mice. Overall, EP3-/- mice had increased epididymal fat mass and adipocyte size; paradoxically a relative decrease in both epididymal fat pad mass and adipocyte size was observed in the heaviest EP3-/- mice. The EP3-/- mice had increased macrophage infiltration, TNF-α, MCP-1, IL-6 expression, and necrosis in their epididymal fat pads as compared to EP3+/+ animals. Adipocytes isolated from EP3+/+ or EP3-/- mice were assayed for the effect of PGE2-evoked inhibition of lipolysis. Adipocytes isolated from EP3-/- mice lacked PGE2-evoked inhibition of isoproterenol stimulated lipolysis compared to EP3+/+. EP3-/- mice fed HFD had exaggerated ectopic lipid accumulation in skeletal muscle and liver, with evidence of hepatic steatosis. Both blood glucose and plasma insulin levels were similar between genotypes on a control diet, but when fed HFD, EP3-/- mice became hyperglycemic and hyperinsulinemic when compared to EP3+/+ fed HFD, demonstrating a more severe insulin resistance phenotype in EP3-/-. These results demonstrate that when fed a HFD, EP3-/- mice have abnormal lipid distribution, developing excessive ectopic lipid accumulation and associated insulin resistance.