The peroxisome proliferator-activated receptor (PPAR-gamma) is a ligand-dependent transcription factor that is important in adipocyte differentiation and glucose homeostasis. This paper presents a detailed dynamics study of PPAR-gamma and its binding to the agonist rosiglitazone using both polarized and unpolarized force fields. The numerical result revealed the critical role of protein polarization in stabilizing the activation function-2 (AF-2) in ligand binding to PPAR-gamma and a helix structure (helix-2'). Specifically when nonpolarized force field is used, a critical H-bond in PPAR-gamma binding is broken, which caused AF-2 to adopt random structures. In addition, helix-2' is partially denatured during the MD simulation, due to the breaking of a backbone hydrogen bond. In contrast, when polarized force field is employed in MID simulation, the PPAR-gamma ligand binding structure is stabilized and the local structure of helix-2' remains folded, both being in excellent agreement with experimental observations. The current result demonstrates the importance of electronic polarization of protein in stabilizing hydrogen bonding, which is critical to preserving the native structure of local helices and protein-ligand binding in PPAR-gamma.