Peroxisome proliferator-activated receptors (PPARs) alpha and gamma are key regulators of lipid homeostasis and insulin resistance. In this study we show that a novel compound, 3-{4-[2-(5-methyl-2-phenyl-oxazol-4-yl)-ethoxy]-phenyl}-2-[2-(2-nitro-ph enoxy)-acetyl amino]-propionic acid (O325H), is an agonist with dual effect on PPAR alpha/gamma by using dual-luciferase reporter gene assay. By activating PPAR alpha and PPAR gamma simultaneously, O325H promotes pre-adipocyte differentiation and up-regulates the expression of glucose and lipid metabolic target genes. In diabetic mice, administration of O325H at 10 mg/kg decreases the blood lipid and glucose levels. Therefore, O325H has dual action on PPAR alpha and PPAR gamma and is a promising agent for the amelioration of lipid metabolic disorders and diabetes associated with insulin resistance.