A drug the U.S. government once branded “extremely dangerous and not fit for human consumption” deserves a second chance, a study of rats suggests. Researchers report that a slow-release version of the compound reverses diabetes and nonalcoholic fatty liver disease (NAFLD), an untreatable condition that can lead to cirrhosis and liver cancer.

Diabetes has already become an epidemic. And up to 30% of people around the world may have a lesser known but related metabolic illness, NAFLD, in which lipids—the family of molecules that includes fats—amass in the liver. Although the extra fat often causes few problems, about 10% to 20% of people develop nonalcoholic steatohepatitis (NASH), a serious illness in which inflammation and scarring can provoke cancer and liver failure. So far, there are no approved drugs for treating either condition. “This is one of the biggest unmet needs in medicine today,” says hepatologist Rohit Loomba of the University of California, San Diego.

To address that need, endocrinologist Gerald Shulman of the Yale University School of Medicine and colleagues proposed resurrecting a drug with a dark history: 2,4 dinitrophenol (DNP). Originally used as an industrial chemical and explosive, the compound captured researchers’ attention after French munitions workers were exposed to high levels of it during World War I. One frequent consequence of this exposure was weight loss—although another consequence was sometimes death. After further research suggested the compound spurred obese people to shed pounds, drugmakers in the 1930s included DNP in diet pills that were available without a prescription. The U.S. Food and Drug Administration (FDA) banned the compound at the end of the decade, however, because it caused side effects such as cataracts and was responsible for a handful of deaths.

Despite its bad reputation, DNP does have some virtues. By altering the activity of mitochondria—the powerhouses that provide cells with energy—it forces the body to burn fat. It provides other metabolic benefits as well. For example, people with NAFLD or diabetes typically have insulin resistance, meaning that their cells don’t respond normally to the hormone that controls blood sugar levels. However, when Shulman and colleagues fed DNP to rats, they found that the drug boosted the animals’ insulin sensitivity.

The researchers decided to design a safer version of DNP that would retain its benefits. First they tried to limit the effects of the drug by creating a version that is active mainly in the liver. In a study published in 2013, the researchers demonstrated that this version of the drug was about one-tenth as toxic as standard DNP. Moreover, the targeted drug reduced fat buildup in the livers of rats that had NAFLD and improved the animals’ insulin sensitivity.

But the researchers thought they could do even better. In their new study, they packed the original form of DNP into a pill that slowly dissolves and releases the drug over 12 to 24 hours. This strategy reduces the amount of the drug in the bloodstream. When fed to rats that devour a fat-laden diet and develop their own version of NAFLD, the slow-release drug slashed their liver lipid levels by about 90%, Shulman and colleagues report online today in Science. Rodents that consumed the drug also saw improvements in their insulin sensitivity and blood glucose quantities. In rats with NASH, the drug reduced fibrosis, the scarring that can cause cirrhosis and liver failure. The team also showed that it reversed diabetes in rats. Comparing the doses that provide these benefits with the doses that trigger side effects, the researchers determined that the slow-release version is safer than the liver-targeted drug.

The study suggests that this gentler version of DNP could be useful for treating diabetes and NAFLD, Shulman says. It reduces fat buildup and corrects defective liver metabolism of glucose, so “it’s getting at the root cause of these diseases.” He and his colleagues plan further animal studies of the drug and hope to move on to safety trials in people.

Hepatologist Sean Koppe of the University of Illinois Hospital & Health Sciences System in Chicago says that the results justify testing the drug in humans. “They show it has a broad window between therapeutic and toxic levels,” he says. Loomba says that the drug’s ability to curb fibrosis, one of the hallmarks of NASH, is encouraging, and he also supports safety trials in people. “This preclinical data is extremely exciting,” he says.

Koppe and Loomba agree that if DNP does prove to be safe and effective in further trials, it could win approval from FDA, despite its history. Banned drugs have made comebacks before. The prime example is thalidomide, which was outlawed in the 1960s because it caused birth defects but has now found a niche in the treatment of cancer and leprosy.