Peroxisome proliferator-activated receptors (PPARs) play a key regulating role in homeostasis. In this study, we investigated the effects of DSP-8658, a novel selective PPARa/γ modulator, on adipogenesis and glucose metabolism in diabetic obese mice and compared these effects to those of pioglitazone, a PPARγ full agonist. DSP-8658 functional activity was assessed by PPARγ-target genes expression in adipose 3T3-L1 cells and its anti-diabetic efficacy evaluated in db/db mice. The effects of DSP-8658 on adipogenesis were investigated diet induced obese (DIO) KK-A(y) mice. DSP-8658 reduced the expression of PPARγ-target gene 11 beta hydroxysteroid dehydrogenase type 1 with an EC50 value 2.1-fold that of pioglitazone and 28.4-fold that of rosiglitazone. On the other hand, DSP-8658 increased the expression of fatty acid binding protein 4 and glycerol kinase genes with EC50 values 33-fold and >15-fold those of pioglitazone and 163-fold and >38-fold those of rosiglitazone, respectively. In db/db mice, DSP-8658, like pioglitazone, decreased blood glucose, HbA1c, and plasma triglyceride levels and increased plasma insulin concentration and pancreatic insulin contents. In DIO KK-A(y) mice, DSP-8658, unlike pioglitazone, decreased subcutaneous adipose tissue weight and mean adipocyte size. However, both DSP-8658 and pioglitazone improved blood glucose and HbA1c levels with similar efficacy. Although DSP-8658 did not change the expression levels of fatty acid transport protein 1 and glycerol kinase genes in subcutaneous adipose tissue of KK-A(y) mice, pioglitazone increased these gene expression levels. Unlike PPARγ full agonists, DSP-8658 ameliorates blood glucose without increasing adipogenesis in diabetic obesity mice.