Our hypothesis is that impairment of peroxisome proliferator-activated receptor-γ (PPARγ) initiates renal dysfunction by increasing renal glomerular matrix metalloproteinase-2 (MMP-2) activity because of increased renal homocysteine (Hcy) and decreased nitric oxide (NO) levels. C57BL/6J mice were made diabetic (D) by being fed a high-fat-calorie diet, and an increase in PPARγ activity was induced by adding pioglitazone (Pi) to the diet. Mice were grouped as follows: normal calorie diet (N), D, N+Pi, and D+Pi (n = 6/group). The glomerular filtration rate (GFR), renal artery blood flow and pressure, and plasma glucose were measured. Renal glomeruli and preglomerular arterioles were isolated. Plasma and glomerular levels of NO, Hcy, and MMP activity were measured. The contractile response to phenylephrine and the dilatation response to acetylcholine in renal arteriolar rings were measured in a tissue myobath. In N, D, N+Pi, and D+Pi groups, respectively, GFR was 9.4 ± 1.2, 3.9 ± 1.1, 9.2 ± 1.6, and 8.4 ± 1.4 μl·min⁻¹·g body wt⁻¹. Renovascular resistance was 140 ± 3, 367 ± 21, 161 ± 9, and 153 ± 10 mmHg·ml·min⁻¹. Levels of Hcy were increased from 5.8 ± 1.5 in the N to 18.0 ± 4.0 μmol/l in the D group. Glomerular levels of MMP-2 were increased in D mice compared with N mice, and there was no change in levels of MMP-9. Treatment with Pi ameliorated glomerular levels of MMP-2 and Hcy in the D group. Renal artery ring contraction and relaxation by phenylephrine and acetylcholine, respectively, were attenuated in the D groups compared with the N groups. Results suggest that a PPARγ agonist ameliorates preglomerular arteriole remodeling in diabetes by decreasing tissue levels of Hcy and MMP-2 activity and increasing NO.