The synthetic thiazolidinedione ligands of peroxisome proliferator-activated receptor-gamma (PPARgamma) improve insulin sensitivity in type II diabetes and induce GLUT4 mRNA expression in fat and muscle. However, the molecular mechanisms involved are still unclear. We studied the regulatory effects of PPARgamma and its ligands on GLUT4 gene expression in primary rat adipocytes and CHO-K1 cells cotransfected with PPARgamma and the GLUT4 promoter reporter. PPARgamma1 and PPARgamma2 repressed the activity of the GLUT4 promoter in a dose-dependent manner. Whereas this repression was augmented by the natural ligand 15Delta-prostaglandin J2, it was completely alleviated by rosiglitazone (Rg). Ligand binding-defective mutants PPARgamma1-L468A/E471A and PPARgamma2-L496A/E499A retained the repression effect, which was unaffected by Rg, whereas the PPARgamma2-S112A mutant exhibited a 50% reduced capacity to repress GLUT4 promoter activity. The -66/+163 bp GLUT4 promoter region was sufficient to mediate PPARgamma inhibitory effects. The PPARgamma/retinoid X receptor-alpha heterodimer directly bound to this region, whereas binding was abolished in the presence of Rg. Thus, we show that PPARgamma represses transcriptional activity of the GLUT4 promoter via direct and specific binding of PPARgamma/retinoid X receptor-alpha to the GLUT4 promoter. This effect requires an intact Ser112 phosphorylation site on PPARgamma and is completely alleviated by Rg, acting via its ligand-binding domain. These data suggest a novel mechanism by which Rg exerts its antidiabetic effects via detaching PPARgamma from the GLUT4 gene promoter, thus leading to increased GLUT4 expression and enhanced insulin sensitivity.