Lysyl hydroxylase 3 (LH3) has lysyl hydroxylase, galactosyltransferase, and glucosyltransferase activities, which are sequentially required for the formation of glucosylgalactosyl hydroxylysines in collagens. Here we demonstrate for the first time that LH3 also modifies the lysine residues in the collagenous domain of adiponectin, which has important roles in glucose and lipid metabolism and inflammation. Hydroxylation and, especially, glycosylation of the lysine residues of adiponectin have been shown to be essential for the formation of the more active high molecular weight adiponectin oligomers and thus for its function. In cells that totally lack LH3 enzyme, the galactosylhydroxylysine residues of adiponectin were not glucosylated to glucosylgalactosylhydroxylysine residues and the formation of high and middle molecular weight adiponectin oligomers was impaired. Circulating adiponectin levels in mutant mice lacking the lysyl hydroxylase activity of LH3 were significantly reduced, which indicates that LH3 is required for complete modification of lysine residues in adiponectin and the loss of some of the glycosylated hydroxylysine residues severely affects the secretion of adiponectin. LH mutant mice with reduced adiponectin level showed a high fat diet-induced increase in glucose, triglyceride, and LDL-cholesterol levels, hallmarks of the metabolic syndrome in humans. Our results reveal the first indication that LH3 is an important regulator of adiponectin biosynthesis, secretion and activity and thus might be a potential candidate for therapeutic applications in diseases associated with obesity and insulin resistance.