The phenotypic and functional plasticity of adipose tissue macrophages during obesity play a crucial role in orchestration of adipose and systemic inflammation. Tonicity-responsive enhancer-binding protein (TonEBP, also called NFAT5) is a stress protein that mediates cellular responses to a range of metabolic insults. Here, we show that myeloid cell-specific TonEBP depletion reduced inflammation and insulin resistance in mice with high-fat diet-induced obesity, but did not affect adiposity. This phenotype was associated with a reduced accumulation and a reduced pro-inflammatory phenotype of metabolically activated macrophages; decreased expression of inflammatory factors related to insulin resistance; and enhanced insulin sensitivity. TonEBP expression was elevated in the adipose tissue macrophages of obese mice, and Sp1 was identified as a central regulator of TonEBP induction. TonEBP depletion in macrophages decreased induction of insulin resistance-related genes and promoted induction of insulin sensitivity-related genes under obesity-mimicking conditions, and thereby improved insulin signaling and glucose uptake in adipocytes. mRNA expression of TonEBP in peripheral blood mononuclear cells was positively correlated with blood glucose levels in mice and humans. These findings suggest that TonEBP in macrophages promotes obesity-associated systemic insulin resistance and inflammation, and downregulation of TonEBP may induce a healthy metabolic state during obesity.