Type 2 diabetes results from progressive pancreatic beta-cell dysfunction caused by chronic insulin resistance. Activation of c-Jun NH2-terminal kinase (JNK) inhibits insulin signaling in cultured cells and in vivo and thereby promotes insulin resistance. Conversely, the peroxisome proliferator-activated receptor (PPAR) gamma synthetic ligands thiazolidinediones (TZDs) enhance insulin sensitivity. Here, we show that the TZDs rosiglitazone and troglitazone inhibit tumor necrosis factor-alpha-induced JNK activation in 3T3-L1 adipocytes. Our results indicate that PPARgamma mediates this inhibitory action because 1) it is reproduced by other chemically unrelated PPARgamma agonist ligands and blocked by PPARgamma antagonists; 2) it is enhanced by PPARgamma overexpression; and 3) it is abrogated by PPARgamma RNA interference. In addition, we show that rosiglitazone inhibits JNK activation and promotes the survival of pancreatic beta-cells exposed to interleukin-1beta. In vivo, the abnormally elevated JNK activity is inhibited in peripheral tissues by rosiglitazone in two distinct murine models of obesity. Moreover, rosiglitazone fails to enhance insulin-induced glucose uptake in primary adipocytes from ob/ob JNK1-/- mice. Accordingly, we demonstrate that the hypoglycemic action of rosiglitazone is abrogated in the diet-induced obese JNK1-deficient mice. In summary, we describe a novel mechanism based on targeting the JNK signaling pathway, which is involved in the hypoglycemic and potentially in the pancreatic beta-cell protective actions of TZDs/PPARgamma.