GPR40 (FFAR1) is a promising target for the managing type 2 diabetes (T2D). The most advanced GPR40 agonist TAK-875 exhibited satisfactory glucose-lowering effects in phase II and III studies. However, the phase III studies of TAK-875 revealed drug-induced liver injury (DILI). It is unknown whether DILI is a consequence of a specific GPR40 agonist or is an inherent feature of all GPR40 agonists. CPL207280 is a novel GPR40 agonist that improves diabetes in Zucker Diabetic Fatty (ZDF) rats, Goto Kakizaki (GK) rats and db/db mice. In this report, the DILI-related toxicity of CPL207280 was compared directly with that of TAK-875. In vitro studies evaluating hepatic biliary transporter inhibition, mitochondrial function, and metabolic profiling were performed in hepatocytes from different species. The long term toxicity of CPL207280 was studied in vivo in rats and monkeys. Activity of CPL207280 was one order of magnitude lesser than that of TAK-875 for the inhibition of bile acid transporters. CPL207280 had a negligible effect on the hepatic mitochondria. In contrast to TAK-875, which was metabolized through toxic glucuronidation, CPL207280 was metabolized mainly through oxidation. No deleterious hepatic effects were observed in chronically treated healthy and diabetic animals. The study presents promising data on the feasibility of creating a liver-safe GPR40 agonist. Additionally, it can be concluded that DILI is not a hallmark of GPR40 agonists; it is linked to the intrinsic properties of an individual agonist.