The fat-derived hormone adiponectin has been shown to have a protective role in macrovascular disorders. However, nothing is known about the function of adiponectin in retinal microvessel disease. Here, we investigated the causal role of adiponectin in retinal vessel formation and inflammation under conditions of hypoxia. When neonatal mice were subjected to ischemia-induced retinopathy, pathological retinal neovascularization during ischemia was exacerbated in adiponectin-knockout (APN-KO) mice compared with wild-type mice (neovascular area: 17.0±1.0% versus 11.7±0.6%, respectively). APN-KO mice also exhibited increased leukocyte adhesion (2.3±0.4-fold) and tumor necrosis factor (TNF)- expression (2.6±0.2-fold) in hypoxic retina. Adenovirus-mediated overexpression of adiponectin in wild-type and APN-KO mice attenuated hypoxia-induced pathological retinal neovascularization by 35% in wild-type mice and by 40% in APN-KO mice and leukostasis by 64% in wild-type mice and by 75% in APN-KO mice, which were associated with reduced TNF- production. TNF- blockade diminished the enhanced pathological neovascularization in APN-KO mice by 34%, and the inhibitory effects of adiponectin overexpression on retinal neovascularization and leukocyte adhesion were abolished in mice lacking TNF-. These data provide evidence that adiponectin protects against retinal vessel injury following pathological stimuli through modulation of TNF- inflammatory responses.