Adipose tissue distribution is an important determinant of obesity‐related comorbidities. It is well established that central obesity (visceral adipose tissue accumulation) is a risk factor for many adverse health consequences such as dyslipidemia, insulin resistance, and type‐2‐diabetes. We hypothesize that the metabolic dysregulation that occurs following high fat diet‐induced increases in adiposity are due to alterations in visceral adipose tissue function which influence lipid flux to the liver via the portal vein. This metabolic pathology is not exclusively due to increases in visceral adipose tissue mass but also driven by intrinsic characteristics of this particular depot. In Experiment 1, high fat diet (HFD)‐induced obese control (abdominal incision, but no fat manipulation) or autologous (excision and subsequent relocation of adipose tissue) subcutaneous tissue transplantation to the visceral cavity. In Experiment 2, mice received control surgery, subcutaneous fat removal, or heterotransplantation (tissue from obese donor) to the visceral cavity. Body composition analysis and glucose tolerance tests were performed 4 weeks postsurgery. Adipose mass and portal adipokines, cytokines, lipids, and insulin were measured from samples collected at 5 weeks postsurgery. Auto‐ and heterotransplantation in obese mice improved glucose tolerance, decreased systemic insulin concentration, and reduced portal lipids and hepatic triglycerides compared with HFD controls. Heterotransplantation of subcutaneous adipose tissue to the visceral cavity in obese mice restored hepatic insulin sensitivity and reduced insulin and leptin concentrations to chow control levels. Fat removal, however, as an independent procedure exacerbated obesity‐induced increases in leptin and insulin concentrations. Overall subcutaneous adipose tissue protects against aspects of metabolic dysregulation in obese mice. Transplantation‐induced improvements do not occur via enhanced storage of lipid in adipose tissue, however, altered hepatic lipid regulation may play a contributory role.