Increasing evidence suggests that adipose tissue plays a key role in the development, progression, and treatment of the globally epidemic disease type 2 diabetes (T2D). For example, adipose tissue dysfunction, lipotoxicity, and insulin resistance (IR) are major contributors and targets for the treatment of T2D. We previously identified the Fibroblast growth factor 1 (FGF1) / Phosphodiesterase 4D (PDE4D) pathway, which lowers plasma glucose concentration by suppressing lipolysis in adipose tissue and ultimately regulating hepatic glucose production in obese insulin-resistant mice. While phosphorylation of PDE4D is critical for its activity, the upstream signaling mechanisms remain unclear. In this study, we identified p21-activated kinases (PAKs) as regulator of PDE4D phosphorylation and suppression of lipolysis by FGF1. Inhibition of PAK-induced cAMP accumulation prevented antilipolytic function of FGF1, and reversed suppression of lipolysis caused by PDE4D overexpression, linking PAKs to the regulation of cAMP by PDE4D in murine adipocytes in vitro. Chronic inhibition of PAKs decreased lipid accumulation in both mouse and human adipocyte cultures, lowered expression of adipogenic markers, and induced IR, suggesting a previously unidentified role of PAKs in adipocyte function and differentiation. We conclude that PAKs play a crucial role in regulating the FGF1/PDE4D antilipolytic pathway, adipogenesis and IR, thereby highlighting their potential as therapeutic targets for T2D.