2-butyl-5-methyl-6-(pyridine-3-yl)-3-[2'-(1H-tetrazole-5-yl)-biphenyl-4-ylmethyl]-3H-imidazo[4,5-b]pyridine] (TM-25659), known as the TAZ activator, inhibits adipocyte differentiation by interacting with peroxisome proliferator-activated receptor gamma (PPAR-γ). TM-25659 was previously shown to decrease weight gain in a high fat (HF) diet induced obesity (DIO) mouse model. However, the fundamental mechanisms underlying the effects of TM-25659 remain unknown. Therefore, we investigated the molecular mechanisms underlying the contribution of TM-25659 on palmitate (PA)-induced insulin resistance in both C2 myotubes and HepG2 cells. TM-25659 improved the PA-induced insulin resistance in C2 myotubes. TM-25659 induced expression of FGF21 mRNA and protein and secretion of FGF21 in C2 myotubes via activation of GCN2 pathways (GCN2-phosphor-eIF2α-ATF4 and FGF21). This effect of TM-25659 was diminished by FGF21 siRNA. Furthermore, TM-25659 improved the PA-induced insulin resistance in HepG2 cells. TM-25659 induced activation of AMPK in HepG2 cells. This beneficial effect of TM-25659 was diminished by AMPK inhibitor, compound C. Additionally, we studied the effects of TM-25659 on HF-diet induced insulin resistance in C57BL/6J mice. C57BL/6J mice were fed a HF-diet for 6 weeks. The HF group was randomly divided into two groups for the next 8 weeks: HF and HF+TM-25659. The HF+TM-25659-treated mice showed improvements in their obesity, fasting blood glucose and insulin levels, serum lipid levels, glucose homeostasis, insulin sensitivity, insulin resistance, and inflammation, but food intake was not affected. TM-25659 increased expressions of both FGF21 mRNA and protein on HF-diet induced insulin resistance in C57BL/6J mice muscle. Also, TM-25659 induced activation of AMPK protein on HF-diet induced insulin resistance in C57BL/6J mice liver. These data indicate TM-25659 may be beneficial for treating insulin resistance by inducing FGF21 and AMPK activation in models of PA-induced insulin resistance and HF-diet induced insulin resistance.