Traditional thiazolidinediones (TZDs), such as rosiglitazone, are peroxisome proliferator-activated receptor γ (PPARγ) potent agonists that can be used to treat type 2 diabetes but carry unwanted effects, including increased risk for fracture. The present work aimed to compare the insulin-sensitizing efficacies and bone-loss side effects of CMHX008, a novel TZDs-like PPARγ partial agonist, with those of rosiglitazone. A TR-FRET PPARγ competitive binding assay was used to compare the binding affinity between CMHX008 and rosiglitazone. Mice were administered vehicle, CMHX008 or rosiglitazone for 16 weeks. Mesenchymal stem cells (MSCs) were used to examine differences in differentiation into osteoblasts after compounds treatment. TR-FRET showed lower affinity to PPARγ by CMHX008 compared with rosiglitazone. Mice treated with CMHX008 showed insulin sensitization similar to that of mice treated with rosiglitazone, which was related to the significant inhibition of PPARγ Ser273 phosphorylation and improved insulin sensitivity by facilitating the phosphorylation of insulin receptor and Akt in adipose tissues. Micro-CT and histomorphometric analyses demonstrated that the degree of trabecular bone loss after treatment with CMHX008 was weaker than that observed with rosiglitazone, as evidenced by consistent changes in BV/TV, Tb. N, Tb. Th, Tb. Sp, and the mineral apposition rate. MSCs treated with CMHX008 showed higher ALP activity and mRNA levels of bone formation markers than did cells treated with rosiglitazone in the osteoblast differentiation test. Thus, CMHX008 showed insulin-sensitizing effects similar to those of rosiglitazone with a lower risk of bone loss, suggesting that PPARγ sparing eliminates the skeletal side effects of TZDs while maintaining their insulin-sensitizing properties.