Thiazolidinediones (TZDs) are effective therapies for type 2 diabetes, which has reached epidemic proportions in industrialized societies. TZD treatment reduces circulating free fatty acids (FFAs), which oppose insulin actions in skeletal muscle and other insulin target tissues. Here we report that TZDs, acting as ligands for the nuclear receptor peroxisome proliferator-activated receptor (PPAR)-gamma, markedly induce adipocyte glycerol kinase (GyK) gene expression. This is surprising, as standard textbooks indicate that adipocytes lack GyK and thereby avoid futile cycles of triglyceride breakdown and resynthesis from glycerol and FFAs. By inducing GyK, TZDs markedly stimulate glycerol incorporation into triglyceride and reduce FFA secretion from adipocytes. The 'futile' fuel cycle resulting from expression of GyK in adipocytes is thus a novel mechanism contributing to reduced FFA levels and perhaps insulin sensitization by antidiabetic therapies.