Peroxisome proliferator-activated receptor (PPAR)gamma is a key transcription factor facilitating fat deposition in adipose tissue through its proadipogenic and lipogenic actions. Human patients with dominant-negative mutations in PPARgamma display lipodystrophy and extreme insulin resistance. For this reason it was completely unexpected that mice harboring an equivalent mutation (P465L) in PPARgamma developed normal amounts of adipose tissue and were insulin sensitive. This finding raised important doubts about the interspecies translatability of PPARgamma-related findings, bringing into question the relevance of other PPARgamma murine models. Here, we demonstrate that when expressed on a hyperphagic ob/ob background, the P465L PPARgamma mutant grossly exacerbates the insulin resistance and metabolic disturbances associated with leptin deficiency, yet reduces whole-body adiposity and adipocyte size. In mouse, coexistence of the P465L PPARgamma mutation and the leptin-deficient state creates a mismatch between insufficient adipose tissue expandability and excessive energy availability, unmasking the deleterious effects of PPARgamma mutations on carbohydrate metabolism and replicating the characteristic clinical symptoms observed in human patients with dominant-negative PPARgamma mutations. Thus, adipose tissue expandability is identified as an important factor for the development of insulin resistance in the context of positive energy balance.