Ertiprotafib belongs to a novel class of insulin sensitizers developed for treatment of type 2 diabetes. In insulin-resistant rodent models, ertiprotafib and a close analog lowered both fasting blood glucose and insulin levels and improved glycemic excursion during an oral glucose tolerance test. In addition, treatment of rodents improved lipid profiles, with significantly lowered triglyceride and free fatty acid levels. These results suggested that this therapeutic activity might involve mechanisms in addition to PTP1b inhibition. In this study, we demonstrate that ertiprotafib activates peroxisome proliferator-activated receptor (PPAR)alpha and PPARgamma at concentrations comparable with those of known agonists of these regulators. Furthermore, it is able to drive adipocyte differentiation of C3H10T(1/2) cells, a hallmark of PPARgamma activation. Livers from ertiprotafib-treated animals showed significant induction of acyl-CoA oxidase activity, probably caused by PPARalpha engagement in these animals. We also show that ertiprotafib inhibits PTP1b in vitro with nonclassic kinetics at concentrations above its EC(50) for PPAR agonism. Thus, the complete mechanism of action for ertiprotafib and related compounds in vivo may involve multiple independent mechanisms, including (but not necessarily limited to) PTP1b inhibition and dual PPARalpha/PPARgamma agonism. Ertiprotafib pharmacology and interpretation of clinical results must be seen in light of this complexity.