Given the link between systemic inflammation, body composition and insulin resistance (IR), anti-inflammatory therapy may improve IR and body composition in inflammatory joint diseases. This study assesses the IR and beta cell function in rheumatoid arthritis (RA) patients with active disease compared to osteoarthritis (OA) patients and investigates the effect of anti-TNF treatment on IR, beta cell function and body composition in RA. 28 Consecutive RA patients starting anti-TNF treatment (adalimumab), and 28 age, and sex-matched patients with OA were followed for 6 months. Exclusion criteria were use of statins, corticosteroids, and cardiovascular or endocrine co-morbidity. Pancreatic beta cell function and IR, using the homeostasis model assessment (HOMA2), and body composition, using dual-energy X-ray absorptiometry (DXA) were measured at baseline and 6 months. At baseline, IR [1.5 (1.1–1.8) vs. 0.7 (0.6–0.9), 100/%S] and beta cell function (133% vs. 102%) were significantly (p < 0.05) higher in RA patients with active disease as compared to OA patients. After 6 months of anti-TNF treatment, IR [1.5 (1.1–1.8) to 1.4 (1.1–1.7), p = 0.17] slightly improved and beta cell function [133% (115–151) to 118% (109–130), p <0.05] significantly improved. Improvement in IR and beta cell function was most pronounced in RA patients with highest decrease in CRP and ESR. Our observations indicate that IR and increased beta cell function are more common in RA patients with active disease. Anti-TNF reduced IR and beta cell function especially in RA patients with highest decrease in systemic inflammation and this effect was not explained by changes in body composition.