PPARγ is the functioning receptor for the thiazolidinedione (TZD) class of antidiabetes drugs including rosiglitazone and pioglitazone. These drugs are full classical agonists for this nuclear receptor, but recent data have shown that many PPARγ-based drugs have a separate biochemical activity, blocking the obesity-linked phosphorylation of PPARγ by Cdk5 (ref. ). Here we describe novel synthetic compounds that have a unique mode of binding to PPARγ, completely lack classical transcriptional agonism and block the Cdk5-mediated phosphorylation in cultured adipocytes and in insulin-resistant mice. Moreover, one such compound, SR1664, has potent antidiabetic activity while not causing the fluid retention and weight gain that are serious side effects of many of the PPARγ drugs. Unlike TZDs, SR1664 also does not interfere with bone formation in culture. These data illustrate that new classes of antidiabetes drugs can be developed by specifically targeting the Cdk5-mediated phosphorylation of PPARγ.