Peroxisome proliferator-activated receptor γ (PPARγ), the molecular target for antidiabetic thiazolidinediones (TZDs), is a master regulator of preadipocyte differentiation and lipid metabolism. The adverse side effects of TZDs, arising from their potent agonistic activity, can be minimized by PPARγ partial agonists or PPARγ non-agonists without loss of insulin sensitization. In this study, we reported that WSF-7, a synthetic chemical derived from natural monoterpene α-pinene, is a partial PPARγ agonist. We found that WSF-7 binds directly to PPARγ. Activation of PPARγ by WSF-7 promotes adipogenesis, adiponectin oligomerization and insulin-induced glucose uptake. WSF-7 also inhibits obesity-mediated PPARγ phosphorylation at serine (Ser)273 and improves insulin sensitivity of 3T3-L1 adipocytes. Our study suggested that WSF-7 activates PPARγ transcription by a mechanism different from that of rosiglitazone or luteolin. Therefore, WSF-7 might be a potential therapeutic drug to treat type 2 diabetes.