An increased level of circulating monocytes is associated with atherosclerotic cardiovascular disease and can play a causative role. In the setting of diabetes, even when optimal lipid control is achieved, atherosclerotic lesion regression is impaired. We discovered that hyperglycemia drives monocyte production in mouse models of type 1 diabetes by stimulating haematopoietic progenitor cell proliferation. This increase in circulating monocytes contributed to impaired lesion regression as there was persistent entry of monocytes into the lesion. Interestingly, monocytosis is also observed in people with obesity/insulin resistance. We found that lowering blood glucose with a Sodium Glucose co-transporter 2 inhibitor (SGLT2i) in obese insulin resistant mice with mild hyperglycemia, failed to lower blood monocytes. Instead we found a prominent role for the obese adipose tissue (AT) in stimulating monocyte production. Adipose S100A8/A9 induced AT macrophage (ATM) TLR4/MyD88 and NLRP3 inflammasome-dependent IL-1β production. IL-1β interacted with the IL-1 receptor on BM myeloid progenitors to stimulate the production of monocytes and neutrophils. These studies uncover a positive feedback loop between ATMs and BM myeloid progenitors and suggest that inhibition of TLR4 ligands or the NLRP3-IL-1β signaling axis could reduce AT inflammation and insulin resistance in obesity.