Agonists of Perioxisome Proliferator-Activator Receptor gamma (PPARgamma), which work as insulin sensitizers, are approved for type 2 diabetes. However, adverse effects, such as oedemas, infarctions, and increased fracture rates, limit their applicability. We performed a head-to-head comparison of equipotent glucose lowering concentrations of the partial PPARgamma agonist balaglitazone and the full agonist pioglitazone in male diet-induced obese rats, to investigate effects on bone formation, fluid retention and fat accumulation. Sixty male dio induced obese rats were divided into five categories: vehicle, pioglitazone 10 mg/kg, pioglitazone 30 mg/kg, balaglitazone 5 mg/kg, balaglitazone 10 mg/kg. At day -7, 21 and 42 fasting serum samples were collected and whole body tissue composition was evaluated by MR scanning. Food intake and bodyweights were monitored during the study period. At day 42, an oral glucose tolerance test was performed to evaluate glucose homeostasis in the rats. During oral glucose tolerance test both pioglitazone and balaglitazone lowered baseline glucose and maintained the suppression during the oral glucose tolerance test. Both lowered basal insulin, peak insulin secretion and total insulin during oral glucose tolerance test. Both drugs increased bodyweight, although this was more pronounced in the pioglitazone 30 group. MR scans of body fat and water showed that all treatment groups increased their fat mass, whereas only the pioglitazone 30 group accumulated water. Pioglitazone treatment led to reduction of the bone formation marker osteocalcin, whereas balaglitazone treatment did not affect it. Balaglitazone is a novel PPARgamma agonist, which potently lowers glucose levels, while it neither affects fluid retention nor bone formation parameters.