APPL1 is a newly identified adiponectin receptor-binding protein that positively mediates adiponectin signaling in cells. Here we report that APPL2, an isoform of APPL1 that forms a dimer with APPL1, can interacts with both AdipoR1 and AdipoR2 and acts as a negative regulator of adiponectin signaling in muscle cells. Overexpression of APPL2 inhibits the interaction between APPL1 and AdipoR1, leading to down-regulation of adiponectin signaling in C2C12 myotubes. In contrast, suppressing APPL2 expression by RNAi significantly enhances adiponectin-stimulated glucose uptake and fatty acid oxidation. In addition to targeting directly to and competing with APPL1 in binding with the adiponectin receptors, APPL2 also suppresses adiponectin and insulin signaling by sequestrating APPL1 from these two pathways. In addition to adiponectin, metformin also induces APPL1-APPL2 dissociation. Taken together, our results reveal that APPL isoforms function as an integrated Yin-Yang regulator of adiponectin signaling and mediate the cross-talk between adiponectin and insulin signaling pathways in muscle cells.