Currently approved thiazolidinediones (TZDs) are effective insulin-sensitizing drugs that may have efficacy for treatment of a variety of metabolic and inflammatory diseases, but their use is limited by side effects that are mediated through ectopic activation of the peroxisome proliferator-activated receptor γ (PPARγ). Emerging evidence suggests that the potent anti-diabetic efficacy of TZDs can be separated from the ability to serve as ligands for PPARγ. A novel TZD analog (MSDC-0602) with very low affinity for binding and activation of PPARγ was evaluated for its effects on insulin resistance in obese mice. MSDC-0602 treatment markedly improved several measures of multiorgan insulin sensitivity, adipose tissue inflammation, and hepatic metabolic derangements, including suppressing hepatic lipogenesis and gluconeogenesis. These beneficial effects were mediated at least in part via direct actions on hepatocytes and were preserved in hepatocytes from liver-specific PPARγ(-/-) mice, indicating that PPARγ was not required to suppress these pathways. In conclusion, the beneficial pharmacology exhibited by MSDC-0602 on insulin sensitivity suggests that PPARγ-sparing TZDs are effective for treatment of type 2 diabetes with reduced risk of PPARγ-mediated side effects.