Peroxisome proliferator-activated receptor (PPAR) γ is a ligand-inducible transcription factor mediating glucose and lipid metabolism. Prior studies showed that YM440 ameliorated hyperglycemia in diabetic mice without affecting body fat weight or PPARγ transactivation. In this study we have examined further the effects of YM440 on PPARγ binding, transactivation and conformational change. YM440, pioglitazone and rosiglitazone displaced [ 3 H ]rosiglitazone from PPARγ with K i values of 4.0, 3.1, and 0.20 μM, indicating that YM440 was comparable to pioglitazone and 20-fold less potent than rosiglitazone. Although pioglitazone and rosiglitazone increased both PPARγ transactivation in cells expressing human full-length PPARγ2 or GAL4-PPARγ and mRNA expression of PPARγ responsive genes in 3T3-L1 cells, YM440 had weak effects on PPARγ transactivation and mRNA expression being 550- to 790-fold and 36- to 110-fold less active than rosiglitazone, respectively. YM440 and rosiglitazone induced interaction between PPARγ and the transcriptional cofactor, p300 or SRC-1, but YM440 was 151- and 1091-fold less potent than rosiglitazone, respectively. The weak transcriptional activity of YM440 was not due to poor cell permeability. Limited trypsin digestion of the full-length human PPARγ2 with YM440 or rosiglitazone showed distinct patterns of digestion, suggesting a difference in the conformational change of PPARγ. When db/db mice were treated with YM440 (100 mg/kg) for 28 days, YM440 increased hepatic glucokinase expression but not adipose tissue FABP and UCP1 expression, indicating a tissue selective expression of PPARγ-related genes. Unique properties regarding the binding-transactivation of PPARγ by YM440 may lead to the hypoglycemic activity without affecting body fat weight in diabetic mice.