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Tumor necrosis factor-α (TNF-α) converting enzyme/a disintegrin and metalloproteinase domain-containing protein 17 (TACE/ADAM17) is a key sheddase that releases TNF-α from its inactive precursor and is thought as a new drug target to inhibit TNF-α production. In the present study, pharmacological effects of a novel TACE selective inhibitor, JTP-96193, on type 2 diabetes and diabetic peripheral neuropathy (DPN) as its major complication was examined. Enzyme inhibitory activity of JTP-96193 on TACE and other ADAMs was measured in in vitro. High fat-induced obese mice and type 2 diabetic KK-Ay mice were used to evaluate the effect of JTP-96193 on insulin resistance. Finally, streptozotocin (STZ)-induced diabetic mice were treated with JTP-96193 to evaluate the sciatic motor nerve conduction velocities (MNCV). JTP-96193 selectively inhibited human TACE activity with IC50 value of 5.4 nM and showed more than 1800-fold selectivity against other matrix metalloproteinases. In mouse models of obesity and diabetes, JTP-96193 reduced the TNF-α release from the fat tissue and prevented development of diabetes and improved insulin resistance, respectively. Furthermore, JTP-96193 prevented delay of sciatic MNCV without any effects on blood glucose or insulin levels in STZ-induced diabetic mice. TACE inhibitor is effective on insulin resistance and DPN independent from glucose-lowering effect. These pharmacological properties of JTP-96193 may be helpful to treat type 2 diabetes accompanied by its microvascular complications.