Aberrant mitochondrial fission plays a pivotal role in the pathogenesis of skeletal muscle insulin resistance. However, fusion-fission dynamics are physiologically regulated by inherent tissue-specific and nutrient-sensitive processes that may have distinct or even opposing effects with respect to insulin sensitivity. Based on a combination of mouse population genetics and functional in vitro assays, we describe here a regulatory circuit in which peroxisome proliferator–activated receptor γ (PPARγ), the adipocyte master regulator and receptor for the thiazolidinedione class of antidiabetic drugs, controls mitochondrial network fragmentation through transcriptional induction of Bnip3. Short hairpin RNA–mediated knockdown of Bnip3 in cultured adipocytes shifts the balance toward mitochondrial elongation, leading to compromised respiratory capacity, heightened fatty acid β-oxidation-associated mitochondrial reactive oxygen species generation, insulin resistance, and reduced triacylglycerol storage. Notably, the selective fission/Drp1 inhibitor Mdivi-1 mimics the effects of Bnip3 knockdown on adipose mitochondrial bioenergetics and glucose disposal. We further show that Bnip3 is reciprocally regulated in white and brown fat depots of diet-induced obesity and leptin-deficient ob/ob mouse models. Finally, Bnip3−/− mice trade reduced adiposity for increased liver steatosis and develop aggravated systemic insulin resistance in response to high-fat feeding. Together, our data outline Bnip3 as a key effector of PPARγ-mediated adipose mitochondrial network fragmentation, improving insulin sensitivity and limiting oxidative stress.