Agonists for the nuclear receptor peroxisomal proliferator-activated receptor-gamma (PPARgamma) and its heterodimeric partner, retinoid X receptor (RXR), are effective agents for the treatment of type 2 diabetes. To gain insight into the antidiabetic action of these compounds, we treated female Zucker diabetic rats (ZFF) with AGN194204, which we show to be a homodimer-specific RXR agonist, or the PPARgamma agonist, troglitazone. Hyperinsulinemic-euglycemic clamps in ZFF showed that troglitazone and AGN194204 reduced basal endogenous glucose production (EGP) approximately 30% and doubled the insulin suppression of EGP. AGN194204 had no effect on peripheral glucose utilization, whereas troglitazone increased insulin-stimulated glucose utilization by 50%, glucose uptake into skeletal muscle by 85%, and de novo skeletal muscle glycogen synthesis by 300%. Troglitazone increased skeletal muscle Irs-1 and phospho-Akt levels following in vivo insulin treatment, whereas AGN194204 increased hepatic Irs-2 and insulin stimulated phospho-Akt in liver. Gene profiles of AGN194204-treated mouse liver analyzed by Ingenuity Pathway Analysis identified increases in fatty acid synthetic genes, including Srebp-1 and fatty acid synthase, a pathway previously shown to be induced by RXR agonists. A network of down-regulated genes containing Foxa2, Foxa3, and G-protein subunits was identified, and decreases in these mRNA levels were confirmed by quantitative reverse transcription-PCR. Treatment of HepG2 cells with AGN194204 resulted in inhibition of glucagon-stimulated cAMP accumulation suggesting the G-protein down-regulation may provide an additional mechanism for hepatic insulin sensitization by RXR. These studies demonstrate distinct molecular events lead to insulin sensitization by high affinity RXR and PPARgamma agonists.