Individuals infected with SARS-CoV-2 who also display hyperglycemia suffer from longer hospital stays, higher risk of developing acute respiratory distress syndrome (ARDS), and increased mortality. Nevertheless, the pathophysiological mechanism of hyperglycemia in COVID-19 remains poorly characterized. Here, we show that hyperglycemia is similarly prevalent among patients with ARDS independent of COVID-19 status. Yet among patients with ARDS and COVID-19, insulin resistance is the prevalent cause of hyperglycemia, independent of glucocorticoid treatment, which is unlike patients with ARDS but without COVID-19, where pancreatic beta cell failure predominates. A screen of glucoregulatory hormones revealed lower levels of adiponectin in patients with COVID-19. Hamsters infected with SARS-CoV-2 demonstrated a strong antiviral gene expression program in the adipose tissue and diminished expression of adiponectin. Moreover, we show that SARS-CoV-2 can infect adipocytes. Together these data suggest that SARS-CoV-2 may trigger adipose tissue dysfunction to drive insulin resistance and adverse outcomes in acute COVID-19.