Thiazolidinediones are a new class of antidiabetic agent that improve insulin sensitivity and reduce plasma glucose and blood pressure in subjects with type 2 diabetes. Although these agents can bind and activate an orphan nuclear receptor, peroxisome proliferator-activated receptor gamma (PPARgamma), there is no direct evidence to conclusively implicate this receptor in the regulation of mammalian glucose homeostasis. Here we report two different heterozygous mutations in the ligand-binding domain of PPARgamma in three subjects with severe insulin resistance. In the PPARgamma crystal structure, the mutations destabilize helix 12 which mediates transactivation. Consistent with this, both receptor mutants are markedly transcriptionally impaired and, moreover, are able to inhibit the action of coexpressed wild-type PPARgamma in a dominant negative manner. In addition to insulin resistance, all three subjects developed type 2 diabetes mellitus and hypertension at an unusually early age. Our findings represent the first germline loss-of-function mutations in PPARgamma and provide compelling genetic evidence that this receptor is important in the control of insulin sensitivity, glucose homeostasis and blood pressure in man.