Peroxisome proliferator-activated receptor gamma (PPARgamma) is well-known as the receptor of thiazolidinedione antidiabetic drugs. In this paper, we present a successful example of employing structure-based virtual screening, a method that combines shape-based database search with a docking study and analogue search, to discover a novel family of PPARgamma agonists based upon pyrazol-5-ylbenzenesulfonamide. Two analogues in the family show high affinity for, and specificity to, PPARgamma and act as partial agonists. They also demonstrate glucose-lowering efficacy in vivo. A structural biology study reveals that they both adopt a distinct binding mode and have no H-bonding interactions with PPARgamma. The absence of H-bonding interaction with the protein provides an explanation why both function as partial agonists since most full agonists form conserved H-bonds with the activation function helix (AF-2 helix) which, in turn, enhances the recruitment of coactivators. Moreover, the structural biology and computer docking studies reveal the specificity of the compounds for PPARgamma could be due to the restricted access to the binding pocket of other PPAR subtypes, i.e., PPARalpha and PPARdelta, and steric hindrance upon the ligand binding.