The synthetic retinoid, Fenretinide (FEN), inhibits obesity and insulin resistance in mice and is in early clinical trials for treatment of insulin resistance in obese humans. We aimed to determine whether alterations in retinoic acid (RA)-responsive genes contribute to the beneficial effects of FEN. We examined the effect of FEN on 3T3-L1 adipocyte differentiation and alterations in gene expression in C57Bl/6 and retinaldehyde dehydrogenase (RALDH) 1 knockout (KO) mice fed a high-fat (HF) diet. FEN completely inhibited adipocyte differentiation by blocking CCAAT/enhancer-binding protein (C/EBP) α/peroxisome proliferator-activated receptor (PPAR) γ-mediated induction of downstream genes and upregulating RA-responsive genes like cellular retinol-binding protein-1. In mice fed an HF diet, RA-responsive genes were markedly increased in adipose, liver, and hypothalamus, with short-term and long-term FEN treatment. In adipose, FEN inhibited the downregulation of PPARγ and improved insulin sensitivity and the levels of adiponectin, resistin, and serum RBP (RBP4). FEN inhibited hyperleptinemia in vivo and leptin expression in adipocytes. Surprisingly, hypothalamic neuropeptide Y expression was completely suppressed, suggesting a central effect of FEN to normalize hyperglycemia. Moreover, FEN induced RA-responsive genes in RALDH1 KO mice, demonstrating that FEN can augment RA signaling when RA synthesis is impaired. We show that FEN-mediated beneficial effects are through alterations in retinoid homeostasis genes, and these are strong candidates as therapeutic targets for the treatment of obesity and insulin resistance.