To investigate the effect of oral nicotine administration on insulin resistance and insulin secretion in an animal model of obesity, Zucker fatty rats were administered nicotine tartrate dihydrate orally through tap water (4.6 mg/kg/d, N group). Plasma nicotine concentrations in N group were 33.67 ± 10.49 ng/mL. The control (C) group consisted of pair-fed control rats. After 8 weeks of nicotine administration, both groups of rats were administered glucose (2 g/kg) orally in an anesthetized state, and blood was collected for glucose and plasma insulin measurements. The pancreases were isolated and perfused in vitro under pentobarbital anesthesia 1 week after glucose administration. The fat tissues were excised. The levels of tumor necrosis factor (TNF)-α protein were assessed using enzyme-linked immunosorbent assay (ELISA) or Western blot analysis. Serum leptin levels were measured using radioimmunoassay (RIA). Blood glucose levels in N group were significantly lower than in C group before and 120 minutes after glucose administration. The insulin secretion from the isolated perfused pancreases of N group appeared to be decreased compared with C group, but there was no significant difference. Histologic examination showed that the mean size of the pancreatic islets in N group was significantly smaller than in C group. The composition ratios of α and β cell mass of the pancreatic islets and fibroelastic tissues were not altered by nicotine administration. Portal TNF-α levels were comparable to peripheral levels in both groups. There were no significant differences in peripheral serum levels of TNF-α, free fatty acids (FFA), or leptin levels between N and C group. The TNF-α levels in visceral fat tissues in N group were significantly lower than those in C group. These results suggest that oral nicotine administration reduces insulin resistance in obese diabetic rats by decreasing production of TNF-α in the visceral fat tissues. Decreased islet size may be a secondary phenomenon induced by ameliorated insulin resistance, because the cellularity and fibroelastic tissues were not affected by the nicotine.