Impairment in the insulin receptor signaling and insulin mediated effects are the key features of type 2 diabetes. Here we report that S961, a peptide insulin receptor antagonist induces hyperglycemia, hyperinsulinemia (∼18-fold), glucose intolerance and impairment in the insulin mediated glucose disposal in the Sprague–Dawley rats. Further, long-term S961 treatment (15day, 10nM/kg/day) depletes energy storage as evident from decrease in the adiposity and hepatic glycogen content. However, peroxysome-proliferator-activated-receptor-gamma (PPARγ) agonist pioglitazone significantly (P<0.001) restored S961 induced hyperglycemia (196.73±16.32 vs. 126.37±27.07mg/dl) and glucose intolerance (≈78%). Improvement in the hyperglycemia and glucose intolerance by pioglitazone clearly demonstrates that S961 treated rats can be successfully used to screen the novel therapeutic interventions having potential to improve glucose disposal through receptor independent mechanisms. Further, results of the present study reconfirms and provide direct evidence to the crucial role of insulin receptor signaling in the glucose homeostasis and fuel metabolism.