Obesity and type-2 diabetes have increased markedly over the past few decades, in parallel. One of the major links between these two disorders is chronic, low-grade inflammation. Prolonged nutrient excess promotes the accumulation and activation of leukocytes in visceral adipose tissue (VAT) and ultimately other tissues, leading to metabolic abnormalities such as insulin resistance, type-2 diabetes and fatty-liver disease. Although invasion of VAT by pro-inflammatory macrophages is considered to be a key event driving adipose-tissue inflammation and insulin resistance, little is known about the roles of other immune system cell types in these processes. A unique population of VAT-resident regulatory T (Treg) cells was recently implicated in control of the inflammatory state of adipose tissue and, thereby, insulin sensitivity. Here we identify peroxisome proliferator-activated receptor (PPAR)-γ, the 'master regulator' of adipocyte differentiation, as a crucial molecular orchestrator of VAT Treg cell accumulation, phenotype and function. Unexpectedly, PPAR-γ expression by VAT Treg cells was necessary for complete restoration of insulin sensitivity in obese mice by the thiazolidinedione drug pioglitazone. These findings suggest a previously unknown cellular mechanism for this important class of thiazolidinedione drugs, and provide proof-of-principle that discrete populations of Treg cells with unique functions can be precisely targeted to therapeutic ends.