Metabolic flexibility is the ability to transition between fat oxidation (fasting state) and glucose oxidation (fed state). We hypothesized that adipose tissue inflammation and lipid metabolism contribute to sexual dimorphism in metabolic flexibility. Respiratory quotient (DeltaRQ, metabolic flexibility) and nonesterified fatty acids (NEFAs) before and during euglycemic-hyperinsulinemic clamp were measured in healthy young women (n = 22) and men (n = 56). Adiponectin levels were measured in plasma. Abdominal subcutaneous adipose tissue gene expression was measured by quantitative reverse transcriptase polymerase chain reaction. As compared with men, women had higher DeltaRQ (0.14 +/- 0.04 vs 0.09 +/- 0.04, P < .01). Fasting RQ and fat cell size were not different between sexes. As compared with men, women had lower insulin-suppressed NEFAs (P < .05); greater adiponectin levels; and higher expression of adipogenesis, fatty acid storage, and oxidation genes (PPARgamma2, PCK1, SCD1, and PPARalpha; P < .05). There were no sex differences in messenger RNA of macrophage markers or chemokines. Stepwise regression analysis revealed that the only adipose tissue characteristics that influenced metabolic flexibility in women were SCD1 and PCK1 messenger RNA (model R(2) = 0.49, P < .05); in men, these were serum adiponectin and insulin-suppressed NEFAs (model R(2) = 0.34, P < .05). Healthy young women are more metabolically flexible than men, driven by an increase in insulin-stimulated glucose oxidation rather than differences in fasting fat oxidation. Women have greater capacity for insulin suppression of NEFAs despite similar chemokine and macrophage content in adipose tissue. Combined, these results provide evidence for a role of adipose tissue characteristics in the sexual dimorphism of metabolic flexibility.