Adiponectin, a novel adipocytokine with insulin sensitizing properties, is inversely related to obesity and insulin resistance in adults. We recently reported large variations in weight gain and insulin sensitivity during the first year in infants born small for gestational age (SGA) or appropriate for gestational age (AGA). We now determined whether adiponectin levels were related to postnatal growth and insulin sensitivity in a prospective cohort followed from birth to two years old (n = 85) (55 female/30 male, 65 SGA/20 AGA). Serum adiponectin levels at one year and two years were higher compared to reported levels in adults and older children, and decreased from one year (21.6 +/- 0.6 microg/ml) to two years (15.7 +/- 0.7 microg/ml) (p < 0.05). At two years adiponectin levels were lower in females (15.3 +/- 0.4 microg/ml) than males (16.4 +/- 0.6 microg/ml) (p < 0.05), but no gender difference was seen in leptin or insulin levels. No differences in adiponectin levels were seen between SGA and AGA infants at one or two years. However, in SGA infants changes in adiponectin between one to two years old were inversely related to weight gain (r = -0.310, p < 0.05). Changes in leptin levels between one to two years were positively related to weight gain in both SGA and AGA infants (r = 0.450 and r = 0.500 respectively, both p < 0.05). Adiponectin levels were unrelated to insulin levels at one or two years, nor to change in insulin levels between one to two years. In multiple regression analysis, adiponectin levels were related only to postnatal age; omitting age from the model, the determinants of higher adiponectin levels were male gender (p = 0.03), lower postnatal body weight (p < 0.001), and higher birth weight SD score (p = 0.004). In conclusion, fall in serum adiponectin levels during the first two years of life were related to increasing age and greater weight gain SGA infants, but were unrelated to insulin sensitivity.