The development of insulin resistance during the peripartum can promote adipose tissue lipolysis. Considering that adiposity can exacerbate free fatty acid (FFA) mobilization, our objective was to characterize insulin action in lean and overconditioned peripartal dairy cows. Twenty-five pregnant, multiparous Holstein dairy cows were enrolled 28 d before expected parturition. Cows were allocated into one of 2 adiposity groups, lean (LEAN; BCS 3.0 ± 0.16) or overconditioned (OVER, BCS 3.9 ± 0.30). Blood samples were collected routinely. Subcutaneous adipose tissue (SubqAT) biopsies were performed on d −12 and 10, relative to parturition. The hyperinsulinemic-euglycemic clamp (HEC) procedure was performed on d −10 and 12, relative to parturition. Plasma and serum metabolites were analyzed using colorimetry. Circulating insulin levels and SubqAT protein kinase B (PKB) phosphorylation were determined using immunoassays. SubqAT adipocyte volume and number were determined. Relative to LEAN, OVER lost more body weight, BCS units, and back fat thickness during the peripartum (P < 0.01). Adipocyte volume was 48% greater in OVER prepartum (P < 0.01); however, adipocyte number was not influenced by adiposity. Adipocyte volume and number decreased from pre- to postpartum (P < 0.01). Plasma FFA levels were consistently elevated in OVER including a 74% surge at parturition (P < 0.01). Plasma β-hydroxybutyrate levels were greater in OVER (P < 0.05). Although plasma glucose or insulin were not modified by adiposity, basal serum insulin concentrations decreased postpartum (P < 0.05). During the HEC, adiposity had no effect on steady state serum glucose, insulin, or FFA levels. Although adiposity did not modify HEC glucose infusion rate (P = 0.18), the insulin sensitivity index (SI_Clamp) was 49% lower for OVER postpartum (P < 0.01). Insulin-stimulated phosphorylation of SubqAT PKB was not affected by adiposity; however, PKB phosphorylation decreased 18% from pre- to postpartum (P < 0.05). We conclude that observed elevations in circulating FFA in overconditioned cows cannot be attributed to impaired SubqAT PKB signaling, albeit adiposity reduced systemic insulin sensitivity.