The biomedical potential of the edible red seaweed Agarophyton chilense (formerly Gracilaria chilensis) has not been explored. Red seaweeds are enriched in polyunsaturated fatty acids and eicosanoids, which are known natural ligands of the PPARγ nuclear receptor. PPARγ is the molecular target of thiazolidinediones (TZDs), drugs used as insulin sensitizers to treat type 2 diabetes mellitus. Medical use of TZDs is limited due to undesired side effects, a problem that has triggered the search for selective PPARγ modulators (SPPARMs) without the TZD side effects. We produced Agarophyton chilense oleoresin (Gracilex®), which induces PPARγ activation without inducing adipocyte differentiation, similar to SPPARMs. In a diet-induced obesity model of male mice, we showed that treatment with Gracilex®improves insulin sensitivity by normalizing altered glucose and insulin parameters. Gracilex®is enriched in palmitic acid, arachidonic acid, oleic acid, and lipophilic antioxidants such as tocopherols and β-carotene. Accordingly, Gracilex® possesses antioxidant activity in vitro and increased antioxidant capacity in vivo in Caenorhabditis elegans. These findings support the idea that Gracilex® represents a good source of natural PPARγ ligands and antioxidants with the potential to mitigate metabolic disorders. Thus, its nutraceutical value in humans warrants further investigation.