Thiazolidinediones (TZDs) are a new class of insulin-sensitizing drugs. To explore how and in which tissues they improve insulin action, we obtained fat and muscle biopsies from eight patients with type 2 diabetes before and 2 months after treatment with rosiglitazone (n = 5) or troglitazone (n = 3). TZD treatment was associated with a coordinated upregulation in the expression of genes and synthesis of proteins involved in fatty acid uptake, binding, beta-oxidation and electron transport, and oxidative phosphorylation in subcutaneous fat but not in skeletal muscle. These changes were accompanied by a 13% increase in total body fat oxidation, a 20% decrease in plasma free fatty acid levels, and a 46% increase in insulin-stimulated glucose uptake. We conclude that TZDs induced a coordinated stimulation of fatty acid uptake, oxidation, and oxidative phosphorylation in fat of diabetic patients and thus may have corrected, at least partially, a recently recognized defect in patients with type 2 diabetes consisting of reduced expression of genes related to oxidative metabolism and mitochondrial function.