PPARgamma and 11beta-HSD1 are attractive therapeutic targets for type 2 diabetes. However, PPARgamma agonists induce adipogenesis, which causes the side effect of weight gain, whereas 11beta-HSD1 inhibitors prevent adipogenesis and may be beneficial for the treatment of obesity in diabetic patients. For the first time, we designed, synthesized a series of alpha-aryloxy-alpha-methylhydrocinnamic acids as dual functional agents which activate PPARgamma and inhibit 11beta-HSD1 simultaneously. The compound 11e exhibited the most potent inhibitory activity compared to that of the lead compound 2, with PPARgamma (EC(50)=6.76 microM) and 11beta-HSD1 (IC(50)=0.76 microM) in vitro. Molecular modeling study for compound 11e was also presented. Compound 11e showed excellent efficacy for lowering glucose, triglycerides, body fat, in well established mice and rats models of diabetes and obesity and had a favorable ADME profile.