Purpose: Familial partial lipodystrophy caused by mutations in the PPARG gene is characterised by altered distribution of subcutaneous fat, muscular hypertrophy and symptoms of metabolic syndrome. PPARG encodes peroxisome proliferator-activated receptor (PPAR)γ, a nuclear hormone receptor playing a crucial role in lipid and glucose metabolism and in several other cellular regulatory processes. Methods: PPARG was screened for mutations by direct sequencing in two patients with lipodystrophy, one unaffected family member and 124 controls. Body composition was examined in affected patients, and they were investigated for abnormalities in laboratory results. Functional analysis of the mutant protein was assessed by determining transcriptional activity and possible interference with the wild-type protein. Results: In two patients with familial partial lipodystrophy, we identified a nucleotide substitution in the PPARG gene. This mutation results in the substitution of aspartate by asparagine at residue 424 (D424N) in the ligand-binding domain of PPARγ. The unaffected family member and all 124 controls did not carry this mutation. D424N PPARγ had a significantly lower ability than wild-type PPARγ to activate a PPARγ-stimulated reporter gene, but did not exert a negative effect on the wild-type protein. Partial activation of D424N PPARγ was achieved in the presence of the agonist rosiglitazone. Conclusion: We report a new PPARG mutation, D424N, which is located in the ligand-binding domain of the protein and leads to familial partial lipodystrophy. D424N PPARγ exhibited a loss of function, which was partially restored by adding the PPARγ agonist rosiglitazone, suggesting possible treatment potential of this agent.