Diabetes mellitus (DM) is a lasting metabolic condition characterized by persistent hyperglycemia caused by dysregulation of carbohydrate, fats and protein metabolism. PPAR-γ, a nuclear receptor regulating adipogenesis, glucose homeostasis, and lipid metabolism, has emerged as a critical target for type 2 diabetes mellitus (T2DM) therapy. This review covers the structural framework, activation mechanism, physiological functions, and its role in metabolic disorders. The therapeutic potential of PPAR-γ agonists, including TZDs, dual and pan-PPAR-modulators, and selective PPAR-γ modulators, is further discussed with emphasis on clinical evidence and comparative efficacy with other metabolic targets. This review particularly discusses the drug resistance caused due to PPAR-γ mutations and highlights the PPAR-γ modulatory potential of naturally occurring ligands. The discussion includes the advancements in the design of synthetic PPAR-γ agonists reported to have antidiabetic activity in the last five years, along with recent structure-activity relationship (SAR) trends. This compilation provides a focused framework aimed at guiding the rational design strategies necessary for advancing development of PPAR-γ agonists. Overall, this review will serve as a valuable resource for medicinal chemists and researchers to develop next-generation antidiabetic agents targeting PPAR-γ.