BACKGROUND. Data from studies conducted in rodent models have shown that decreased adipose tissue (AT) oxygenation is involved in the pathogenesis of obesity-induced insulin resistance. Here, we evaluated the potential influence of AT oxygenation on AT biology and insulin sensitivity in people. METHODS. We evaluated subcutaneous AT oxygen partial pressure (pO2); liver and whole-body insulin sensitivity; AT expression of genes and pathways involved in inflammation, fibrosis, and branched-chain amino acid (BCAA) catabolism; systemic markers of inflammation; and plasma BCAA concentrations, in 3 groups of participants that were rigorously stratified by adiposity and insulin sensitivity: metabolically healthy lean (MHL; n = 11), metabolically healthy obese (MHO; n = 15), and metabolically unhealthy obese (MUO; n = 20). RESULTS. AT pO2 progressively declined from the MHL to the MHO to the MUO group, and was positively associated with hepatic and whole-body insulin sensitivity. AT pO2 was positively associated with the expression of genes involved in BCAA catabolism, in conjunction with an inverse relationship between AT pO2 and plasma BCAA concentrations. AT pO2 was negatively associated with AT gene expression of markers of inflammation and fibrosis. Plasma PAI-1 increased from the MHL to the MHO to the MUO group and was negatively correlated with AT pO2, whereas the plasma concentrations of other cytokines and chemokines were not different among the MHL and MUO groups. CONCLUSION. These results support the notion that reduced AT oxygenation in individuals with obesity contributes to insulin resistance by increasing plasma PAI-1 concentrations and decreasing AT BCAA catabolism and thereby increasing plasma BCAA concentrations.