This study assessed the efficacy of adding metformin to a structured lifestyle intervention in reducing BMI in obese adolescents with insulin resistance. Obese adolescents (25) aged 10–16 years with a body mass index (BMI) > 95th percentile and insulin resistance (Homeostasis Model Assessment—HOMA) > 3.0 were assessed in a community clinic. A structured lifestyle intervention comprising nutritional and exercise education and motivational support in both individual and group sessions was delivered over 6 months. Subjects were randomized to lifestyle intervention alone or with metformin (1500 g daily). The primary outcome measures were a change in BMI and modification of metabolic risk factors, including insulin resistance, plasma lipids and adipocytokines. Eleven adolescents receiving lifestyle and metformin intervention and 14 receiving lifestyle alone completed the study. BMI decreased by 1.8 kg/m² with lifestyle and metformin but did not change with lifestyle alone. HOMA was significantly decreased in the lifestyle intervention group, but not following metformin, while the adiponectin/leptin ratio improved significantly in both groups. Dyslipidemic profiles improved most significantly with metformin. We conclude that metformin in combination with a 6-month structured lifestyle intervention is effective in reducing BMI in obese adolescents but did not improve insulin resistance. Lifestyle intervention, with or without metformin, improved metabolic risk factors such as plasma lipids and adipocytokines.