The purpose of this study was to determine the effects of glucocorticoid-induced metabolic dysfunction in the presence of diet-induced obesity. C57BL/6J adult male lean and diet-induced obese mice were given dexamethasone and levels of hepatic steatosis, insulin resistance and lipolysis were determined. Obese mice given dexamethasone had significant, synergistic effects on fasting glucose, insulin resistance and markers of lipolysis, as well as hepatic steatosis. This was associated with synergistic transactivation of the lipolytic enzyme ATGL. The combination of chronically elevated glucocorticoids and obesity leads to exacerbations in metabolic dysfunction. Our findings suggest lipolysis may be a key player in glucocorticoid-induced insulin resistance and fatty liver in individuals with obesity.