The prevalence of obesity and type 2 diabetes is increasing worldwide and threatens to shorten lifespan. Impaired insulin action in peripheral tissues is a major pathogenic factor. Insulin stimulates glucose uptake in adipose tissue through the GLUT4 (also known as SLC2A4) glucose transporter, and alterations in adipose tissue GLUT4 expression or function regulate systemic insulin sensitivity. Downregulation of human and mouse adipose tissue GLUT4 occurs early in diabetes development. Here we report that adipose tissue GLUT4 regulates the expression of carbohydrate-responsive-element-binding protein (ChREBP; also known as MLXIPL), a transcriptional regulator of lipogenic and glycolytic genes. Furthermore, adipose ChREBP is a major determinant of adipose tissue fatty acid synthesis and systemic insulin sensitivity. We find a new mechanism for glucose regulation of ChREBP: glucose-mediated activation of the canonical ChREBP isoform (ChREBP-alpha) induces expression of a novel, potent isoform (ChREBP-beta) that is transcribed from an alternative promoter. ChREBP-beta expression in human adipose tissue predicts insulin sensitivity, indicating that it may be an effective target for treating diabetes.