Agonists for the nuclear receptor Peroxisomal Proliferator Activated Receptor-- (PPAR) 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 diabetic female Zucker diabetic rats (ZFF) with AGN194204, which we show to be a homodimer specific RXR agonist, or the PPAR agonist, troglitazone. Hyperinsulinemic-euglycemic clamps in ZFF showed that troglitazone and AGN194204 reduced basal endogenous glucose production (EGP) ~30% and doubled the insulin suppression of EGP. AGN194204 had no effect on peripheral glucose utilization while 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 while 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 RT-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 PPAR agonists.