Aims/hypothesis: We examined whether shortterm treatment with a thiazolidinedione improves insulin sensitivity in non-obese but insulin-resistant subjects and whether this is associated with an improvement in dysregulated adipose tissue (reduced expression of IRS-1, GLUT4, PPARγ co-activator 1 and markers of terminal differentiation) that we have previously documented to be associated with insulin resistance. Methods: Ten nondiabetic subjects, identified as having low IRS-1 and GLUT-4 protein in adipose cells as markers of insulin resistance, underwent 3 weeks of treatment with pioglitazone. The euglycaemic-hyperinsulinaemic clamp technique was used to measure insulin sensitivity before and after treatment. Serum samples were analysed for glucose, insulin, lipids, total and high-molecular-weight (HMW) adiponectin levels. Biopsies from abdominal subcutaneous adipose tissue were taken, cell size measured, mRNA and protein extracted and quantified using real-time RT-PCR and Western blot. Results: Insulin sensitivity was improved after 3 weeks treatment and circulating total as well as HMW adiponectin increased in all subjects, while no effect was seen on serum lipids. In the adipose cells, gene and protein expression of IRS-1 and PPARγ co-activator 1 remained unchanged, while adiponectin, adipocyte P 2, uncoupling protein 2, GLUT4 and liver X receptor-α increased. Insulin-stimulated tyrosine phosphorylation and p-ser-PKB/Akt increased, while no significant effect of thiazolidinedione treatment was seen on the inflammatory status of the adipose tissue in these non-obese subjects. Conclusions/interpretation: Short-term treatment with pioglitazone improved insulin sensitivity in the absence of any changes in circulating NEFA or lipid levels. Several markers of adipose cell differentiation, previously shown to be reduced in insulin resistance, were augmented, supporting the concept that insulin resistance in these individuals is associated with impaired terminal differentiation of the adipose cells.