A critical feature of obesity is enhanced insulin secretion from pancreatic β-cells, enabling the majority of individuals to maintain glycaemic control despite adiposity and insulin resistance. Surprisingly, the factors coordinating this adaptive β-cell response with adiposity have not been delineated. Here we show that fatty acid binding protein 4 (FABP4/aP2) is an adipokine released from adipocytes under obesogenic conditions, such as hypoxia, to augment insulin secretion. The insulinotropic action of FABP4 was identified using an in vitro system that recapitulates adipocyte to β-cell endocrine signalling, with glucose-stimulated insulin secretion (GSIS) as a functional readout, coupled with quantitative proteomics. Exogenous FABP4 potentiated GSIS in vitro and in vivo, and circulating FABP4 levels correlated with GSIS in humans. Insulin inhibited FABP4 release from adipocytes in vitro, in mice and in humans, consistent with feedback regulation. These data suggest that FABP4 and insulin form an endocrine loop coordinating the β-cell response to obesity.