Insulin resistance is the key feature of type 2 diabetes and is manifested as attenuated insulin receptor (IR) signaling in response to same levels of insulin binding. Several small molecule IR activators have been identified and reported to exhibit insulin sensitization properties. One of these molecules, TLK19781 (Cmpd1), was investigated to examine its IR sensitizing action in vivo. Our data demonstrate that Cmpd1, at doses that produced minimal efficacy in the absence of insulin, potentiated insulin action during an OGTT in non-diabetic mice and enhanced insulin-mediated glucose lowering in diabetic mice. Interestingly, different from insulin alone, Cmpd1 combined with insulin showed enhanced efficacy and duration of action without increased hypoglycemia. To explore the mechanism underlying the apparent glucose dependent efficacy, tissue insulin signaling was compared in healthy and diabetic mice. Cmpd1 enhanced insulin's effects on IR phosphorylation in both healthy and diabetic mice. In contrast, the compound potentiated insulin's effects on Akt phosphorylation in diabetic but not in non-diabetic mice. These differential effects on signaling corresponding to glucose levels could be part of the mechanism for reduced hypoglycemia risk. The in vivo efficacy of Cmpd1 is specific and dependent on IR expression. Results from these studies support the idea of targeting IR for insulin sensitization, which carries low hypoglycemia risk by standalone treatment and could improve the effectiveness of insulin therapies.