The synthesis and structure-activity relationship studies of novel indole derivatives as peroxisome proliferator-activated receptor (PPAR) agonists are reported. Indole, a drug-like scaffold, was studied as a core skeleton for the acidic head part of PPAR agonists. The structural features (acidic head, substitution on indole, and linker) were optimized first, by keeping benzisoxazole as the tail part, based on binding and functional activity at PPARgamma protein. The variations in the tail part, by introducing various heteroaromatic ring systems, were then studied. In vitro evaluation led to identification of a novel series of indole compounds with a benzisoxazole tail as potent PPAR agonists with the lead compound 14 (BPR1H036) displaying an excellent pharmacokinetic profile in BALB/c mice and an efficacious glucose lowering activity in KKA(y) mice. Structural biology studies of 14 showed that the indole ring contributes strong hydrophobic interactions with PPARgamma and could be an important moiety for the binding to the protein.