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Background/Objectives: Rosiglitazone (RSG), a potent PPARγ agonist for type 2 diabetes mellitus (T2DM), induces adverse adipogenic effects that limit clinical use. We investigated whether emodin (1,3,8-trihydroxy-6-methylanthraquinone, EMO), a natural anthraquinone, mitigates RSG-induced complications while enhancing its insulin-sensitizing benefits in severe obesity. Methods: Male ob/ob mice with established obesity and diabetes were treated for 4 weeks with RSG (10 mg kg^-1 day^-1), EMO (200 or 400 mg kg^-1 day^-1) or their combination. Metabolic profiling, organ function, and adipose histology were analyzed. RNA sequencing and mechanistic studies (Western blot, RT-qPCR, luciferase assays) in inguinal subcutaneous adipose tissue (iSAT), epididymal white adipose tissue (eWAT), and 3T3-L1 adipocytes were used to define EMO's actions. Results: EMO co-treatment dose-dependently reduced RSG-induced weight gain, visceral adiposity (iSAT and eWAT mass, p < 0.05), and ectopic lipid deposition while ameliorating hepatorenal dysfunction. EMO synergistically enhanced RSG's glucose-lowering effects. Mechanistically, EMO suppressed sterol regulatory element-binding protein 1 (SREBP1)-mediated lipogenesis (Srebp1, Acc, Fasn, Scd1; p < 0.05) and enhanced PPARγ-peroxisome proliferator-activated receptor gamma coactivator-1α (PGC-1α)-driven thermogenesis via enhanced PPARγ transactivation and nuclear translocation. Thermogenic genes (Ucp1, Ppargc1a, Cidea; p < 0.05) were upregulated, with maximal uncoupling protein 1 (UCP1) induction in iSAT at 400 mg/kg EMO. Conclusions: EMO selectively enhances RSG's glycemic benefits while attenuating its adipogenic effects in severe obesity by dual PPARγ modulation-inhibiting adipogenic pathways while amplifying thermogenesis. This strategy mitigates RSG's adverse effects while improving insulin sensitivity, supporting the potential of EMO as a PPARγ adjunct therapy.