Lipoatrophic diabetes is caused by a deficiency of adipose tissue and is characterized by severe insulin resistance, hypoleptinemia, and hyperphagia. The A-ZIP/F-1 mouse (A-ZIPTg/+) is a model of severe lipoatrophic diabetes and is insulin resistant, hypoleptinemic, hyperphagic, and shows severe hepatic steatosis. We have also produced transgenic “skinny” mice that have hepatic overexpression of leptin (LepTg/+) and no adipocyte triglyceride stores, and are hypophagic and show increased insulin sensitivity. To explore the pathophysiological and therapeutic roles of leptin in lipoatrophic diabetes, we crossed LepTg/+ and A-ZIPTg/+ mice, producing doubly transgenic mice (LepTg/+:A-ZIPTg/+) virtually lacking adipose tissue but having greatly elevated leptin levels. The LepTg/+:A-ZIPTg/+ mice were hypophagic and showed improved hepatic steatosis. Glucose and insulin tolerance tests revealed increased insulin sensitivity, comparable to LepTg/+ mice. These effects were stable over at least 6 months of age. Pair-feeding the A-ZIPTg/+ mice to the amount of food consumed by LepTg/+:A-ZIPTg/+ mice did not improve their insulin resistance, diabetes, or hepatic steatosis, demonstrating that the beneficial effects of leptin were not due to the decreased food intake. Continuous leptin administration that elevates plasma leptin concentrations to those of LepTg/+:A-ZIPTg/+ mice also effectively improved hepatic steatosis and the disorder of glucose and lipid metabolism in A-ZIP/F-1 mice. These data demonstrate that leptin can improve the insulin resistance and diabetes of a mouse model of severe lipoatrophic diabetes, suggesting that leptin may be therapeutically useful in the long-term treatment of lipoatrophic diabetes.