Insulin-sensitizing thiazolidinedione (TZD) compounds are high affinity ligands for a member of the nuclear receptor family, peroxisome proliferator-activated receptor (PPAR) gamma. A scintillation proximity assay for measurement of 3H-radiolabeled TZD binding to human PPARgamma under homogeneous conditions was developed. Using this approach, a novel non-TZD compound (L-764406) was shown to be a potent (apparent binding IC50 of 70 nM) PPARgamma ligand. Preincubation of PPARgamma with L-764406 prevented binding of the [3H]TZD, suggesting a covalent interaction with the receptor; in addition, structurally related analogues of L-764406, which would be predicted not to interact with PPARgamma in a covalent fashion, did not displace [3H]TZD binding to PPARgamma. Covalent binding of L-764406 was proven by an observed molecular weight shift of a tryptic PPARgamma ligand binding domain (LBD) peptide by mass spectrometric analysis. A specific cysteine residue (Cys313 in helix 3 of hPPARgamma2) was identified as the attachment site for this compound. In protease protection experiments, the liganded receptor adopted a typical agonist conformation. L-764406 exhibited partial agonist activity in cells expressing a chimeric receptor containing the PPARgamma LBD and a cognate reporter gene and also induced the expression of the adipocyte-specific gene aP2 in 3T3-L1 cells. In contrast, L-764406 did not exhibit activity in cells transfected with chimeric receptors containing PPARalpha or PPARdelta LBDs. The partial agonist properties of L-764406 were also evident in a co-activator association assay, indicating that the increased transcription in cells was co-activator mediated. Thus, L-764406 is a novel non-TZD ligand for PPARgamma and is also the first known partial agonist for this receptor. The results suggest a critical functional role for Cys313, and helix 3, in contributing to ligand binding and subsequent agonist-induced conformational changes.