We have identified a novel series of antidiabetic N-(2-benzoylphenyl)-L-tyrosine derivatives which are potent, selective PPARgamma agonists. Through the use of in vitro PPARgamma binding and functional assays (2S)-3-(4-(benzyloxy)phenyl)-2-((1-methyl-3-oxo-3-phenylpropenyl)+ ++amin o)propionic acid (2) was identified as a structurally novel PPARgamma agonist. Structure-activity relationships identified the 2-aminobenzophenone moiety as a suitable isostere for the chemically labile enaminone moiety in compound 2, affording 2-((2-benzoylphenyl)amino)-3-(4-(benzyloxy)phenyl)propionic acid (9). Replacement of the benzyl group in 9 with substituents known to confer in vivo potency in the thiazolidinedione (TZD) class of antidiabetic agents provided a dramatic increase in the in vitro functional potency and affinity at PPARgamma, affording a series of potent and selective PPARgamma agonists exemplified by (2S)-((2-benzoylphenyl)amino)-3-¿4-[2-(methylpyridin-2-ylamino+ ++)ethoxy ]phenyl¿propionic acid (18), 3-¿4-[2-(benzoxazol-2-ylmethylamino)ethoxy]phenyl¿-(2S)-((2- benzoylph enyl)amino)propanoic acid (19), and (2S)-((2-benzoylphenyl)amino)-3-¿4-[2-(5-methyl-2-phenyloxazol-4-y l)e thoxy]phenyl¿propanoic acid (20). Compounds 18 and 20 show potent antihyperglycemic and antihyperlipidemic activity when given orally in two rodent models of type 2 diabetes. In addition, these analogues are readily prepared in chiral nonracemic fashion from L-tyrosine and do not show a propensity to undergo racemization in vitro. The increased potency of these PPARgamma agonists relative to troglitazone may translate into superior clinical efficacy for the treatment of type 2 diabetes.