It is suggested that insulin resistance and metabolic maladaptation of the heart are causes of contractile dysfunction. We tested the hypothesis whether systemic PPARγ activation, by changing the metabolic profile in a model of insulin resistance and type 2 diabetes (the ZDF rat) in vivo, improves contractile function of the heart in vitro. Male Zucker diabetic fatty (ZDF) and Zucker lean (ZL) rats, at 53–56 days of age, were treated with either GI-262570 (a nonthiazolidinedione PPARγ agonist; A) or vehicle (V) for 1 wk. Agonist treatment resulted in correction of hyperglycemia and dyslipidemia, as well as in reduced hyperinsulinemia. The accumulation of triacylglycerols in the myocardium, characteristic of the ZDF rat, disappeared with treatment. Cardiac power and rates of glucose oxidation in the isolated working heart were significantly reduced in ZDF-V rats, but both parameters increased to nondiabetic levels with agonist treatment. In ZDF-V hearts, transcript levels of PPARα-regulated genes and of myosin heavy chain-β were upregulated, whereas GLUT4 was downregulated compared with ZL. Agonist treatment of ZDF rats reduced PPARα-regulated genes and increased transcripts of GLUT4 and GLUT1. In conclusion, by changing the metabolic profile, reducing myocardial lipid accumulation, and promoting the downregulation of PPARα-regulated genes, PPARγ activation leads to an increased capacity of the myocardium to oxidize glucose and to a tighter coupling of oxidative metabolism and contraction in the setting of insulin resistance and type 2 diabetes.