It is generally known that peroxisome proliferator-activated receptors (PPARs) involved in lipid and carbohydrate metabolism, inflammation, and cell differentiation. Currently, three genes in the PPAR family, PPAR-α, PPAR-γ, and PPAR-δ were discovered. Although PPAR-α (fibrate) and PPAR-γ (thiazolidinediones) have been used as chemical tools to uncover other biological roles for the PPARs, PPAR-δ has not been fully investigated. In this study, we examined the effects of the PPARδ agonist GW0742 on fatty liver changes in a type 2 diabetic rat model and HepG2 cells. We investigated the effects of PPARδ agonist GW0742 on fatty liver changes in obese diabetic Otsuka Long-Evans Tokushima Fatty (OLETF) rats and nondiabetic control Long-Evans Tokushima Otsuka (LETO) rats. Intraheptic triglyceride contents were investigated in the liver tissue of OLETF rats. Expression of inflammatory cytokines such as tumor necrosis factor-α (TNF-α), monocyte chemo-attractant protein-1 (MCP-1), and peroxisome proliferator-activated receptor (PPAR)-γ coactivator (PGC)-1α gene were evaluated in OLETF rats and HepG2 cells. Rats treated with GW0742 (10 mg/kg/day) from 26 to 36 weeks showed low glucose levels, improved insulin sensitivity, and attenuated fatty infiltration of the liver. In liver tissues, mRNA expressions of TNF-α, MCP-1, and PGC-1α were significantly decreased in diabetic rats treated with GW0742 compared to the diabetic control rats. We also observed that GW0742 had inhibitory effects on palmitate induced fatty accumulation and inflammatory markers in HepG2 cells.The PPARδ agonist (GW0742) may attenuate hepatic fat accumulation by anti-inflammatory mechanism and by reducing hepatic PGC-1α gene expression.