Hypertension and diabetes are common side effects of glucocorticoid treatment. To determine whether peroxisome proliferator–activated receptor-α (PPAR-α) mediates these sequelae, mice deficient in low-density lipoprotein receptor (Ldlr^−/−), with (Ppara^+/+) or without (Ppara^−/−) PPAR-α, were treated chronically with dexamethasone. Ppara^+/+, but not Ppara^−/−, mice developed hyperglycemia, hyperinsulinemia and hypertension. Similar effects on glucose metabolism were seen in a different model using C57BL/6 mice. Hepatic gluconeogenic gene expression was increased and insulin-mediated suppression of endogenous glucose production was less effective in dexamethasone-treated Ppara^+/+ mice. Adenoviral reconstitution of PPAR-α in the livers of nondiabetic, normotensive, dexamethasone-treated Ppara^−/− mice induced hyperglycemia, hyperinsulinemia and increased gluconeogenic gene expression. It also increased blood pressure, renin activity, sympathetic nervous activity and renal sodium retention. Human hepatocytes treated with dexamethasone and the PPAR-α agonist Wy14,643 induced PPARA and gluconeogenic gene expression. These results identify hepatic activation of PPAR-α as a mechanism underlying glucocorticoid-induced insulin resistance.