Chronic low grade inflammation is closely linked to obesity-associated insulin resistance. To examine how administration of the anti-inflammatory compound indomethacin, a general cyclooxygenase inhibitor, affected obesity development and insulin sensitivity, we fed obesity-prone male C57BL/6J mice a high fat/high sucrose (HF/HS) diet or a regular diet supplemented or not with indomethacin (±INDO) for 7 weeks. Development of obesity, insulin resistance, and glucose intolerance was monitored, and the effect of indomethacin on glucose-stimulated insulin secretion (GSIS) was measured in vivo and in vitro using MIN6 β-cells. We found that supplementation with indomethacin prevented HF/HS-induced obesity and diet-induced changes in systemic insulin sensitivity. Thus, HF/HS+INDO-fed mice remained insulin-sensitive. However, mice fed HF/HS+INDO exhibited pronounced glucose intolerance. Hepatic glucose output was significantly increased. Indomethacin had no effect on adipose tissue mass, glucose tolerance, or GSIS when included in a regular diet. Indomethacin administration to obese mice did not reduce adipose tissue mass, and the compensatory increase in GSIS observed in obese mice was not affected by treatment with indomethacin. We demonstrate that indomethacin did not inhibit GSIS per se, but activation of GPR40 in the presence of indomethacin inhibited glucose-dependent insulin secretion in MIN6 cells. We conclude that constitutive high hepatic glucose output combined with impaired GSIS in response to activation of GPR40-dependent signaling in the HF/HS+INDO-fed mice contributed to the impaired glucose clearance during a glucose challenge and that the resulting lower levels of plasma insulin prevented the obesogenic action of the HF/HS diet.