The inventive compounds of the present invention are comprised of phenyl and pyridinyl-1,2,4-oxadiazolone derivatives and their physiologically acceptable salts and functional derivatives that are shown to provide peroxisome proliferator activator receptor (PPARdelta) agonist activity. The compounds of the present invention are comprised of the formula: wherein the substituents R1-R5 and R7-R10 are defined herein. The compounds are therapeutically effective in the regulation and modulation of lipid and carbohydrate metabolism in mammals and are thus suitable for the treatment of diseases such as type-2 diabetes, atherosclerosis, cardiovascular disorders and the like.