While adipose tissue-associated macrophages contribute to development of chronic inflammation and insulin resistance of obesity, little is known about the role of hepatic Kupffer cells in this environment. Here we address the impact of Kupffer cell ablation using clodronate-encapsulated liposome depletion in a diet-induced obese (DIO) and insulin resistant mouse model. Hepatic expression of macrophage markers measured by realtime RT-PCR remained unaltered in DIO mice despite characteristic expansion of adipose tissue-associated macrophages. DIO mouse livers displayed increased expression of alternative activation markers but unaltered proinflammatory cytokine expression when compared to lean mice. Kupffer cell ablation reduced hepatic anti-inflammatory cytokine IL-10 mRNA expression in lean and DIO mice by 95% and 84%, respectively. Despite decreased hepatic IL-6 gene expression after ablation in lean and DIO mice, hepatic STAT3 phosphorylation, Socs3 and acute phase protein mRNA expression increased. Kupffer cell ablation in DIO mice resulted in additional hepatic triglyceride accumulation and a 30–40% reduction in hepatic insulin receptor autophosphorylation and Akt activation. Implicating systemic loss of IL-10, high-fat-fed IL-10 knockout mice also displayed increased hepatic STAT3 signaling and hepatic triglyceride accumulation. Insulin signaling was not altered, however. In conclusion, Kupffer cells are a major source of hepatic IL-10 expression, the loss of which is associated with increased STAT3-dependent signaling and steatosis. One or more additional factors appear to be required, however, for the Kupffer cell-dependent protective effect on insulin receptor signaling in DIO mice.