Type 2 diabetes mellitus is a complex metabolic disease that occurs when insulin secretion can no longer compensate insulin resistance in peripheral tissues. At the molecular level, insulin resistance correlates with impaired insulin signalling. This review provides new insights into the molecular mechanisms of insulin action and resistance in brown adipose tissue and pinpoints the role of this tissue in the control of glucose homeostasis. Brown adipocytes are target cells for insulin and IGF-I action, especially during late foetal development when insulin supports survival and promotes both adipogenic and thermogenic differentiation. The main pathway involved in insulin induction of adipogenic differentiation, monitored by fatty acid synthase expression, is the cascade insulin receptor substrate (IRS)-1/phosphatidylinositol 3-kinase (PI3K)/Akt. Glucose transport in these cells is maintained mainly by the activity of GLUT4. Acute insulin treatment stimulates glucose transport largely by mediating translocation of GLUT4 to the plasma membrane, involving the activation of IRS-2/PI3K, and the downstream targets Akt and protein kinase C zeta. Tumour necrosis factor (TNF-alpha) caused insulin resistance on glucose uptake by impairing insulin signalling at the level of IRS-2. Activation of stress kinases and phosphatases by this cytokine contribute to insulin resistance. Furthermore, brown adipocytes are also target cells for rosiglitazone action since they show a high expression of peroxisome proliferator activated receptor gamma, and rosiglitazone increased the expression of the thermogenic uncoupling protein 1. Rosiglitazone ameliorates insulin resistance provoked by TNF-alpha, completely restoring insulin-stimulated glucose uptake in parallel to the insulin signalling cascade. Accordingly, foetal brown adipocytes represent a model for investigating insulin action, as well as for the mechanism by which rosiglitazone increase insulin sensitivity under situations that mimic insulin resistance.