Insulin resistance (IR) remains one of the major pathogenic mechanisms for non–insulin-dependent type 2 diabetes mellitus. We have previously modelled IR in H-411E liver cells in culture. In past experiments, we used both labeled glucose uptake, lipogenesis, and stimulation of calmodulin gene expression to quantify the ability of the antidiabetic drugs (pioglitazone and metformin) to reverse tumor necrosis factor-&agr; (TNF-&agr;)-induced IR in these insulin-treated cells. In these current experiments, H-411E liver cells were rendered IR by a combination of TNF-&agr; and insulin. In other experiments, the ability of C2 ceramide (Cer) to inhibit insulin action and induce IR was assessed as well as the phospholipase C inhibitor D609 to reverse IR induced by these TNF-&agr;–like agents. C2 Cer, like TNF-&agr;, inhibited insulin action. D609 reversed TNF-&agr; induced—and to a lesser extent, C2 Cer-induced—IR. At selected times, the cells were also treated with troglitazone (TRG) in 2 groups: (1) 1-time exposure and (2) chronic exposure followed by acute exposure. TRG concentrations ranged from 0.015 to 15.0 &mgr;mol/L. Our data demonstrate a powerful effect of TRG in reducing IR and restoring insulin sensitivity in TNF-&agr;–treated H-411E cells. Furthermore, pretreatment with TRG, reflecting chronic exposure, as in human clinical use, was more potent than 1-time acute exposure. These data support the efficacy of using thiazolidinediones (TRG) in human type 2 diabetes, and support the use of this cell culture model to further study the effects of thiazolidinediones on TNF-&agr;–induced insulin resistance.