Mitochondria are dynamic organelles that play a key role in energy conversion. Optimal mitochondrial function is ensured by a quality-control system tightly coupled to fusion and fission. In this connection, mitofusin 2 (Mfn2) participates in mitochondrial fusion and undergoes repression in muscle from obese or type 2 diabetic patients. Here, we provide in vivo evidence that Mfn2 plays an essential role in metabolic homeostasis. Liver-specific ablation of Mfn2 in mice led to numerous metabolic abnormalities, characterized by glucose intolerance and enhanced hepatic gluconeogenesis. Mfn2 deficiency impaired insulin signaling in liver and muscle. Furthermore, Mfn2 deficiency was associated with endoplasmic reticulum stress, enhanced hydrogen peroxide concentration, altered reactive oxygen species handling, and active JNK. Chemical chaperones or the antioxidant N-acetylcysteine ameliorated glucose tolerance and insulin signaling in liver-specific Mfn2 KO mice. This study provides an important description of a unique unexpected role of Mfn2 coordinating mitochondria and endoplasmic reticulum function, leading to modulation of insulin signaling and glucose homeostasis in vivo.