Adiponectin is well established to mediate many beneficial metabolic effects, and this has stimulated great interest in development and validation of adiponectin receptor agonists as pharmaceutical tools. This study investigated the effects of ALY688, a peptide-based adiponectin receptor agonist, in rat L6 skeletal muscle cells. ALY688 significantly increased phosphorylation of several adiponectin downstream effectors, including AMPK, ACC and p38MAPK, assessed by immunoblotting and immunofluorescence microscopy. Temporal analysis using cells expressing an Akt biosensor demonstrated that ALY688 enhanced insulin sensitivity. This effect was associated with increased insulin-stimulated Akt and IRS-1 phosphorylation. The functional metabolic significance of these signaling effects was examined by measuring glucose uptake in myoblasts stably overexpressing the glucose transporter GLUT4. ALY688 treatment both increased glucose uptake itself and enhanced insulin-stimulated glucose uptake. In the model of high glucose/high insulin (HGHI)-induced insulin resistant cells, both temporal studies using the Akt biosensor as well as immunoblotting assessing Akt and IRS-1 phosphorylation indicated that ALY688 significantly reduced insulin resistance. Importantly, we observed that ALY688 administration to high-fat high sucrose fed mice also improve glucose handling, validating its efficacy in vivo. In summary, these data indicate that ALY688 activates adiponectin signaling pathways in skeletal muscle, leading to improved insulin sensitivity and beneficial metabolic effects.