Obesity is associated with intrahepatic inflammation that promotes insulin resistance and type 2 diabetes. Tumor necrosis factor receptor-associated factor (TRAF)2 is a key adaptor molecule that is known to mediate proinflammatory cytokine signaling in immune cells; however, its metabolic function remains unclear. We examined the role of hepatic TRAF2 in the regulation of insulin sensitivity and glucose metabolism. TRAF2 was deleted specifically in hepatocytes using the Cre/loxP system. The mutant mice were fed a high-fat diet (HFD) to induce insulin resistance and hyperglycemia. Hepatic glucose production (HGP) was examined using pyruvate tolerance tests, (2)H nuclear magnetic resonance spectroscopy, and in vitro HGP assays. The expression of gluconeogenic genes was measured by quantitative real-time PCR. Insulin sensitivity was analyzed using insulin tolerance tests and insulin-stimulated phosphorylation of insulin receptors and Akt. Glucagon action was examined using glucagon tolerance tests and glucagon-stimulated HGP, cAMP-responsive element-binding (CREB) phosphorylation, and expression of gluconeogenic genes in the liver and primary hepatocytes. Hepatocyte-specific TRAF2 knockout (HKO) mice exhibited normal body weight, blood glucose levels, and insulin sensitivity. Under HFD conditions, blood glucose levels were significantly lower (by >30%) in HKO than in control mice. Both insulin signaling and the hypoglycemic response to insulin were similar between HKO and control mice. In contrast, glucagon signaling and the hyperglycemic response to glucagon were severely impaired in HKO mice. In addition, TRAF2 overexpression significantly increased the ability of glucagon or a cAMP analog to stimulate CREB phosphorylation, gluconeogenic gene expression, and HGP in primary hepatocytes. These results suggest that the hepatic TRAF2 cell autonomously promotes hepatic gluconeogenesis by enhancing the hyperglycemic response to glucagon and other factors that increase cAMP levels, thus contributing to hyperglycemia in obesity.