Tumor necrosis factor (TNF)-alpha is one of the candidate mediators of insulin resistance associated with obesity, a major risk factor for the development of type 2 diabetes. The insulin resistance induced by TNF-alpha is antagonized by thiazolidinediones (TZDs), a new class of insulin-sensitizing drugs. The aim of the current study was to dissect the mechanism whereby pioglitazone, one of the TZDs, ameliorates TNF-alpha-induced insulin resistance in 3T3-L1 adipocytes. Pioglitazone restored insulin-stimulated 2-deoxyglucose (DOG) uptake, which was reduced by TNF-alpha, with concomitant restorations in tyrosine phosphorylation and protein levels of insulin receptor (IR) and insulin receptor substrate (IRS)-1, as well as association of the p85 regulatory subunit of phosphatidylinositol (PI) 3-kinase with IRS-1 and PI 3-kinase activity. Adenovirus-mediated gene transfer of either wild-type human peroxisome proliferator-activated receptor (PPAR)-gamma2 or a mutant carrying a replacement at the consensus mitogen-activated protein kinase phosphorylation site (hPPAR-gamma2-S112A) promoted adipogenesis of 3T3-L1 fibroblasts and restored TNF-alpha-induced decrease of triglyceride in adipocytes as effectively as pioglitazone. Overexpression of the PPAR-gamma proteins in TNF-alpha-treated adipocytes restored protein levels of IR/IRS-1, but did not improve insulin-stimulated tyrosine phosphorylation of IR/IRS-1 or insulin-stimulated 2-DOG uptake. These results indicate that the ability of pioglitazone to restore insulin-stimulated tyrosine phosphorylation of IR/IRS-1, which is necessary for amelioration of TNF-alpha-induced insulin resistance, may be independent of the adipogenic activity of PPAR-gamma that regulates protein levels of IR/IRS-1.