The number of patients with type 2 diabetes mellitus (T2DM), which is mainly characterized by insulin resistance and insulin secretion deficiency, has been soaring in recent years. Accompanied by many other metabolic syndromes, such as cardiovascular diseases, T2DM represents a big challenge to public health and economic development. Peroxisome proliferator-activated receptor γ (PPARγ), a ligand-activated nuclear receptor that is critical in regulating glucose and lipid metabolism, has been developed as a powerful drug target for T2DM, such as thiazolidinediones (TZDs). Despite thiazolidinediones (TZDs), a class of PPARγ agonists, having been proven to be potent insulin sensitizers, their use is restricted in the treatment of diabetes for their adverse effects. Post-translational modifications (PTMs) have shed light on the selective activation of PPARγ, which shows great potential to circumvent TZDs’ side effects while maintaining insulin sensitization. In this review, we will focus on the potential effects of PTMs of PPARγ on treating T2DM in terms of phosphorylation, acetylation, ubiquitination, SUMOylation, O-GlcNAcylation, and S-nitrosylation. A better understanding of PTMs of PPARγ will help to design a new generation of safer compounds targeting PPARγ to treat type 2 diabetes.