The previous failures of PPARγ agonists treating type two diabetes (T2DM) have highlighted the need for improved drugs that lack transcriptionally-promoting activity on PPARγ. It has been shown that high-affinity non-activating ligands of the nuclear receptor promote insulin sensitivity to combat type 2 diabetes, but without the harmful or even fatal side effects associated with full activation of the receptor. A robust understanding of the underlying structural mechanisms determining the level of receptor activation induced by the ligand has long evaded researchers. We have solved the crystal structure of an antagonist and an inverse agonist in complex with the ligand binding domain of PPARγ, which reveal the first instance of a global structural change in PPARγ. These non-activating ligands of PPARγ attract helix 12 (the activation helix) away from the coactivator binding surface of the LBD, which in turn enables the formation of a larger peptide binding pocket which can accommodate binding of transcriptionally-repressing corepressors. This mechanism is distinct from other nuclear receptors such as estrogen receptor or PPARα, where current structural data has shown that their non-activating ligands clash with helix 12 to force it out of the “active” conformation and into the antagonist conformation. We complemented our crystal structures with native mass spectrometry to verify the corepressor-recruiting capabilities of both ligands, which confirmed the macromolecular mechanism of antagonism by these potential drug candidates. This highlights a major development in the field of PPARγ research, as well as the wider nuclear receptor field, for its unique mechanism and biological implications.