Peroxisome proliferator-activated receptor (PPAR)alpha and PPARgamma agonists lower lipid accumulation in muscle and liver by different mechanisms. We investigated whether benefits could be achieved on insulin sensitivity and lipid metabolism by the dual PPARalpha/gamma agonist ragaglitazar in high fat-fed rats. Ragaglitazar completely eliminated high-fat feeding-induced liver triglyceride accumulation and visceral adiposity, like the PPARalpha agonist Wy-14643 but without causing hepatomegaly. In contrast, the PPARgamma agonist rosiglitazone only slightly lessened liver triglyceride without affecting visceral adiposity. Compared with rosiglitazone or Wy-14643, ragaglitazar showed a much greater effect (79%, P < 0.05) to enhance insulin's suppression of hepatic glucose output. Whereas all three PPAR agonists lowered plasma triglyceride levels and lessened muscle long-chain acyl-CoAs, ragaglitazar and rosiglitazone had greater insulin-sensitizing action in muscle than Wy-14643, associated with a threefold increase in plasma adiponectin levels. There was a significant correlation of lipid content and insulin action in liver and particularly muscle with adiponectin levels (P < 0.01). We conclude that the PPARalpha/gamma agonist ragaglitazar has a therapeutic potential for insulin-resistant states as a PPARgamma ligand, with possible involvement of adiponectin. Additionally, it can counteract fatty liver, hepatic insulin resistance, and visceral adiposity generally associated with PPARalpha activation, but without hepatomegaly.