Obesity is associated with low-grade inflammation, insulin resistance, type 2 diabetes, and cardiovascular disease. This study investigated the effect of a 15-wk lifestyle intervention (hypocaloric diet and daily exercise) on inflammatory markers in plasma, adipose tissue (AT), and skeletal muscle (SM) in 27 severely obese subjects (mean body mass index: 45.8 kg/m2). Plasma samples, subcutaneous abdominal AT biopsies, and vastus lateralis SM biopsies were obtained before and after the intervention and analyzed by ELISA and RT-PCR. The intervention reduced body weight (P < 0.001) and increased insulin sensitivity (homeostasis model assessment; P < 0.05). Plasma adiponectin (P < 0.001) increased, and C-reactive protein (P < 0.05), IL-6 (P < 0.01), IL-8 (P < 0.05), and monocyte chemoattractant protein-1 (P < 0.01) decreased. AT inflammation was reduced, determined from an increased mRNA expression of adiponectin (P < 0.001) and a decreased expression of macrophage-specific markers (CD14, CD68), IL-6, IL-8, and tumor necrosis factor-alpha (P < 0.01). After adjusting for macrophage infiltration in AT, only IL-6 mRNA was decreased (P < 0.05). Only very low levels of inflammatory markers were found in SM. The intervention had no effect on adiponectin receptor 1 and 2 mRNA in AT or SM. Thus hypocaloric diet and increased physical activity improved insulin sensitivity and reduced low-grade inflammation. Markers of inflammation were particularly reduced in AT, whereas SM does not contribute to this attenuation of whole body inflammation.