Background: The transcriptional factor peroxisome proliferator-activated receptor g (PPARg) is an important therapeutic target for the treatment of type 2 diabetes. However, the role of the PPARg transcriptional activity remains ambiguous in its metabolic regulation. Methods: Based on the crystal structure of PPARg bound with the DNA target of PPARg response element (PPRE), Arg134, Arg135, and Arg138, three crucial DNA binding sites for PPARg, were mutated to alanine (3RA), respectively. In vitro AlphaScreen assay and cell-based reporter assay validated that PPARg 3RA mutant cannot bind with PPRE and lost transcriptional activity, while can still bind ligand (rosiglitazone) and cofactors (SRC1, SRC2, and NCoR). By using CRISPR/Cas9, we created mice that were heterozygous for PPARg-3RA (PPARg 3RA/+). The phenotypes of chow diet and high-fat diet fed PPARg 3RA/+ mice were investigated, and the molecular mechanism were analyzed by assessing the PPARg transcriptional activity. Results: Homozygous PPARg-3RA mutant mice are embryonically lethal. The mRNA levels of PPARg target genes were significantly decreased in PPARg 3RA/+ mice. PPARg 3RA/+ mice showed more severe adipocyte hypertrophy, insulin resistance, and hepatic steatosis than wild type mice when fed with high-fat diet. These phenotypes were ameliorated after the transcription activity of PPARg was restored by rosiglitazone, a PPARg agonist. Conclusion: The current report presents a novel mouse model for investigating the role of PPARg transcription in physiological functions. The data demonstrate that the transcriptional activity plays an indispensable role for PPARg in metabolic regulation.