The thiazolidinediones are novel insulin sensitizers that serve as orally active antidiabetic agents, in rodents, nonhuman primates, and man. We have examined the effects of 4-week oral administration of three thiazolidinediones (AD-5075, BRL 49653, and CS-045) on plasma glucose and triglyceride concentrations in obese hyperglycemic db/db mice. All three agents lower plasma glucose and triglyceride concentrations. Normal levels of glucose are achieved after treatment with AD-5075 (> 1.7 mg/kg) or BRL 49653 (> or = 30 mg/kg), whereas CS-045 (100 or 300 mg/kg) produces only modest reductions in either parameter. Although the thiazolidinediones have demonstrated insulin-sensitizing activities both in vivo and in vitro, their primary molecular target has been unclear. We have compared the in vivo antidiabetic actions described above with the in vitro activities on peroxisomal proliferator-activated receptor-gamma (PPAR gamma). Hamster PPAR gamma 1 was transiently expressed in COS-1 cells to study the binding of [3H]AD-5075. The concentrations of compounds needed to displace radiolabeled AD-5075 from PPAR gamma correlate with their in vivo potency; the Ki values for displacement by cold AD-5075, BRL 49653, and CS-045 are 22, 68, and 1600 nM, respectively. To examine activation of the receptor, it was transiently cotransfected into COS-1 cells with a reporter plasmid containing two copies of a peroxisome proliferator response element. The EC50 values for activation are 2, 6, and 140 nM for AD-5075, BRL 49653, and CS-045, respectively. We have also analyzed limited proteolytic digests of in vitro translated hamster PPAR gamma. The thiazolidinediones produce a conformational change in PPAR gamma analogous to those produced by agonists of other nuclear hormone receptors. In the presence of saturating concentrations of either AD-5075 or BRL 49653, a receptor fragment of 27 kDa is protected from proteolysis by trypsin. These data support the conclusion that the antidiabetic actions of the thiazolidinediones are directly mediated through binding to PPAR gamma and the resulting active conformation of the receptor. Therefore, binding and transactivation assays using PPAR gamma should serve to identify other novel therapeutic agents with potential antidiabetic activities.