The thiazolidinedione class of insulin-sensitizing, antidiabetic drugs interacts with peroxisome proliferator-activated receptor gamma (PPAR-gamma). To gain insight into the role of this nuclear receptor in insulin resistance and diabetes, we conducted metabolic studies in the PPAR-gamma gene knockout mouse model. Because homozygous PPAR-gamma-null mice die in development, we studied glucose metabolism in mice heterozygous for the mutation (PPAR-gamma(+/-) mice). We identified no statistically significant differences in body weight, basal glucose, insulin, or FFA levels between the wild-type (WT) and PPAR-gamma(+/-) groups. Nor was there a difference in glucose excursion between the groups of mice during oral glucose tolerance test, but insulin concentrations of the WT group were greater than those of the PPAR-gamma(+/-) group, and insulin-induced increase in glucose disposal rate was significantly increased in PPAR-gamma(+/-) mice. Likewise, the insulin-induced suppression of hepatic glucose production was significantly greater in the PPAR-gamma(+/-) mice than in the WT mice. Taken together, these results indicate that - counterintuitively - although pharmacological activation of PPAR-gamma improves insulin sensitivity, a similar effect is obtained by genetically reducing the expression levels of the receptor.