The metabolic syndrome is a collection of obesity-related disorders. The peroxisome proliferator-activated receptors (PPARs) regulate transcription in response to fatty acids and, as such, are potential therapeutic targets for these diseases. We show that PPARdelta (NR1C2) knockout mice are metabolically less active and glucose-intolerant, whereas receptor activation in db/db mice improves insulin sensitivity. Euglycemic-hyperinsulinemic-clamp experiments further demonstrate that a PPARdelta-specific agonist suppresses hepatic glucose output, increases glucose disposal, and inhibits free fatty acid release from adipocytes. Unexpectedly, gene array and functional analyses suggest that PPARdelta ameliorates hyperglycemia by increasing glucose flux through the pentose phosphate pathway and enhancing fatty acid synthesis. Coupling increased hepatic carbohydrate catabolism with its ability to promote beta-oxidation in muscle allows PPARdelta to regulate metabolic homeostasis and enhance insulin action by complementary effects in distinct tissues. The combined hepatic and peripheral actions of PPARdelta suggest new therapeutic approaches to treat type II diabetes.