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As previously reported, adipocyte-specific ablation of the cav1 gene (ad-cav1 knockout [KO] mouse) does not result in elimination of the protein, as cav1 protein traffics to adipocytes from neighboring endothelial cells. However, this mouse is a functional KO because adipocyte caveolar structures are depleted. Compared with controls, ad-cav1KO mice on a high-fat diet (HFD) display improved whole-body glucose clearance despite complete loss of glucose-stimulated insulin secretion, blunted insulin-stimulated AKT activation in metabolic tissues, and partial lipodystrophy. The cause is increased insulin-independent glucose uptake by white adipose tissue (AT) and reduced hepatic gluconeogenesis. Furthermore, HFD-fed ad-cav1KO mice display significant AT inflammation, fibrosis, mitochondrial dysfunction, and dysregulated lipid metabolism. The glucose clearance phenotype of the ad-cav1KO mice is at least partially mediated by AT small extracellular vesicles (AT-sEVs). Injection of control mice with AT-sEVs from ad-cav1KO mice phenocopies ad-cav1KO characteristics. Interestingly, AT-sEVs from ad-cav1KO mice propagate the phenotype of the AT to the liver. 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