Peroxisome proliferator-activated receptors (PPARs) α and γ are key regulators of lipid homeostasis and are activated by a structurally diverse group of compounds including fatty acids, eicosanoids, and hypolipidemic drugs such as fibrates and thiazolidinediones. While thiazolidinediones and 15-deoxy-Δ^12,14-prostaglandin J₂ have been shown to bind to PPARγ, it has remained unclear whether other activators mediate their effects through direct interactions with the PPARs or via indirect mechanisms. Here, we describe a novel fibrate, designated GW2331, that is a high-affinity ligand for both PPARα and PPARγ. Using GW2331 as a radioligand in competition binding assays, we show that certain mono- and polyunsaturated fatty acids bind directly to PPARα and PPARγ at physiological concentrations, and that the eicosanoids 8(S)-hydroxyeicosatetraenoic acid and 15-deoxy-Δ^12,14-prostaglandin J₂ can function as subtype-selective ligands for PPARα and PPARγ, respectively. These data provide evidence that PPARs serve as physiological sensors of lipid levels and suggest a molecular mechanism whereby dietary fatty acids can modulate lipid homeostasis.