Lysimachia foenum-graecum extract (LFE) and its active component foenumoside B (FSB) have been shown to inhibit adipocyte differentiation, but their mechanisms were poorly defined. Here, we investigated the molecular mechanisms responsible for their anti-adipogenic effects. Both LFE and FSB inhibited the differentiation of 3T3-L1 preadipocytes induced by peroxisome proliferator-activated receptor-γ (PPARγ) agonists, accompanied by reductions in the expressions of the lipogenic genes aP2, CD36, and FAS. Moreover, LFE and FSB inhibited PPARγ transactivation activity with IC50s of 22.5 μg/ml and 7.63 μg/ml, respectively, and showed selectivity against PPARα and PPARδ. Rosiglitazone-induced interaction between PPARγ ligand binding domain (LBD) and coactivator SRC-1 was blocked by LFE or FSB, whereas reduced NCoR-1 binding to PPARγ by rosiglitazone was reversed in the presence of LFE or FSB. In vivo administration of LFE into either ob/ob mice or KKAy mice reduced body weights, and levels of PPARγ and C/EBPα in fat tissues. Furthermore, insulin resistance was ameliorated by LFE treatment, with reduced adipose tissue inflammation and hepatic steatosis. Thus, LFE and FSB were found to act as PPARγ antagonists that improve insulin sensitivity and metabolic profiles. We propose that LFE and its active component FSB offer a new therapeutic strategy for metabolic disorders including obesity and insulin resistance.