Identifying markers of human insulin resistance may permit development of new approaches for treatment and prevention of type 2 diabetes. To this end, we analyzed the fasting plasma metabolome in metabolically characterized human volunteers across a spectrum of insulin resistance. We demonstrate that plasma betaine levels are reduced in insulin-resistant humans and correlate closely with insulin sensitivity. Moreover, betaine administration to mice with diet-induced obesity prevents the development of impaired glucose homeostasis, reduces hepatic lipid accumulation, increases white adipose oxidative capacity, and enhances whole-body energy expenditure. In parallel with these beneficial metabolic effects, betaine supplementation robustly increased hepatic and circulating fibroblast growth factor (Fgf)21 levels. Betaine administration failed to improve glucose homeostasis and liver fat content in Fgf21(-/-) mice, demonstrating that Fgf21 is necessary for betaine's beneficial effects. Together, these data indicate that dietary betaine increases Fgf21 levels to improve metabolic health in mice and suggest that betaine supplementation merits further investigation as a supplement for treatment or prevention of type 2 diabetes in humans.