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Obesity-induced endoplasmic reticulum (ER) stress causes chronic inflammation in adipose tissue and steatosis in the liver, and eventually leads to insulin resistance and type 2 diabetes (T2D). The goal of this study was to understand the mechanisms by which administration of bilirubin, a powerful antioxidant, reduces hyperglycemia and ameliorates obesity in leptin-receptor-deficient (db/db) and diet-induced obese (DIO) mouse models. db/db or DIO mice were injected with bilirubin or vehicle ip. Blood glucose and body weight were measured. Activation of insulin-signaling pathways, expression of inflammatory cytokines, and ER stress markers were measured in skeletal muscle, adipose tissue, and liver of mice. Bilirubin administration significantly reduced hyperglycemia and increased insulin sensitivity in db/db mice. Bilirubin treatment increased protein kinase B (PKB/Akt) phosphorylation in skeletal muscle and suppressed expression of ER stress markers, including the 78-kDa glucose-regulated protein (GRP78), CCAAT/enhancer-binding protein (C/EBP) homologous protein, X box binding protein (XBP-1), and activating transcription factor 4 in db/db mice. In DIO mice, bilirubin treatment significantly reduced body weight and increased insulin sensitivity. Moreover, bilirubin suppressed macrophage infiltration and proinflammatory cytokine expression, including TNF-α, IL-1β, and monocyte chemoattractant protein-1, in adipose tissue. In liver and adipose tissue of DIO mice, bilirubin ameliorated hepatic steatosis and reduced expression of GRP78 and C/EBP homologous protein. These results demonstrate that bilirubin administration improves hyperglycemia and obesity by increasing insulin sensitivity in both genetically engineered and DIO mice models. Bilirubin or bilirubin-increasing drugs might be useful as an insulin sensitizer for the treatment of obesity-induced insulin resistance and type 2 diabetes based on its profound anti-ER stress and antiinflammatory properties.