Fatty acid binding protein-4 (FABP4) and FABP5 are two closely related FA binding proteins expressed primarily in adipose tissue and/or macrophages. The small-molecule FABP4 inhibitor BMS309403 was previously reported to improve insulin sensitivity in leptin-deficient Lep(ob)/Lep(ob) (ob/ob) mice. However, this compound was not extensively characterized in the more physiologically relevant animal model of mice with diet-induced obesity (DIO). Here, we report the discovery and characterization of a novel series of FABP4/5 dual inhibitors represented by Compounds 1-3. Compared with BMS309403, the compounds had significant in vitro potency toward both FABP4 and FABP5. In cell-based assays, Compounds 2 and 3 were more potent than BMS309403 to inhibit lipolysis in 3T3-L1 adipocytes and in primary human adipocytes. They also inhibited MCP-1 release from THP-1 macrophages as well as from primary human macrophages. When chronically administered to DIO mice, BMS309403 and Compound 3 reduced plasma triglyceride and free FA levels. Compound 3 reduced plasma free FAs at a lower dose level than BMS309403. However, no significant change was observed in insulin, glucose, or glucose tolerance. Our results indicate that the FABP4/5 inhibitors ameliorate dyslipidemia but not insulin resistance in DIO mice.