The major malfunction in diabetes mellitus is severe perturbation of glucose homeostasis caused by deficiency of insulin. Insulin deficiency is either absolute due to destruction or failure of pancreatic β cells, or relative due to decreased sensitivity of peripheral tissues to insulin. The primary lesion being related to insulin, treatments for diabetes focus on insulin replacement and/or increasing sensitivity to insulin. These therapies have their own limitations and complications, some of which can be life-threatening. For example, exogenous insulin administration can lead to fatal hypoglycemic episodes; islet/pancreas transplantation requires life-long immunosuppressive therapy; and anti-diabetic drugs have dangerous side effects including edema, heart failure and lactic acidosis. Thus the need remains for better safer long term treatments for diabetes. The ultimate goal in treating diabetes is to re-establish glucose homeostasis, preferably through endogenously generated hormones. Recent studies increasingly show that extra-pancreatic hormones, particularly those arising from adipose tissue, can compensate for insulin, or entirely replace the function of insulin under appropriate circumstances. Adipose tissue is a versatile endocrine organ that secretes a variety of hormones with far-reaching effects on overall metabolism. While unhealthy adipose tissue can exacerbate diabetes through limiting circulation and secreting of pro-inflammatory cytokines, healthy uninflamed adipose tissue secretes beneficial adipokines with hypoglycemic and anti-inflammatory properties, which can complement and/or compensate for the function of insulin. Administration of specific adipokines is known to alleviate both type 1 and 2 diabetes, and leptin mono-therapy is reported to reverse type 1 diabetes independent of insulin. Although specific adipokines may correct diabetes, administration of individual adipokines still carries risks similar to those of insulin monotherapy. Thus a better approach is to achieve glucose homeostasis with endogenously-generated adipokines through transplantation or regeneration of healthy adipose tissue. Our recent studies on mouse models show that type 1 diabetes can be reversed without insulin through subcutaneous transplantation of embryonic brown adipose tissue, which leads to replenishment of recipients' white adipose tissue; increase of a number of beneficial adipokines; and fast and long-lasting euglycemia. Insulin-independent glucose homeostasis is established through a combination of endogenously generated hormones arising from the transplant and/or newly-replenished white adipose tissue. Transplantation of healthy white adipose tissue is reported to alleviate type 2 diabetes in rodent models on several occasions, and increasing the content of endogenous brown adipose tissue is known to combat obesity and type 2 diabetes in both humans and animal models. While the underlying mechanisms are not fully documented, the beneficial effects of healthy adipose tissue in improving metabolism are increasingly reported, and are worthy of attention as a powerful tool in combating metabolic disease.