Adipose tissue from streptozotocin-diabetic rats exhibits half-maximal lipolytic responses (FFA, glycerol release, increase in tissue FFA) to epinephrine at hormone concentrations 5-10 times lowere than those required for half-maximal stimulation of lipolysis in adipose tissue from normal rats. The lipolytic response to epinephrine also occurs more promptly and the antilipolytic effect of insulin in the presence of submaximal epinephrine conceptrations is much less pronounced than in normal tissue. In contrast, diabetic adipose tissue is less responsive to ACTH and glucagon than normal tissue. Half-maximal lipolytic responses are elicited by similar dibutyryl cyclic AMP concentrations in both tissues. Insulin treatment of diabetic rats during 24 hrs restores the lipolytic response of their adipose tissue to epinephrine to nearly normal. Our findings point to an abnormality of diabetic adipose tissue possibly related to the hypersensitivity of catecholamines encountered in denervated organs which are adrenergically innvervated. They are consistent with present concept of different hormone discriminators on the fat cell membrane and offer a further explanation for increased FFA mobilization in the diabetic state.