Scientists at the University of New South Wales in Sydney, Australia, began their experiment to try and find a way to prevent type 2 diabetes.
The condition is triggered by obesity, but is caused by resistance to the blood-sugar controlling hormone insulin.
But instead of affecting blood sugar, the drug created by the scientists stopped the mice's bodies developing body fat.
Researchers say their discovery is the first time scientists have managed to stop this process.
Reducing obesity could cut cancer and heart disease deaths
Now, they say, the pill could have much bigger implications and cutting down obesity rates could reduce people's risk of getting type 2 diabetes, cancer, heart disease and dementia, all of which are more likely to affect fat people.
One of the study's authors, Professor Nigel Turner said: "Since obesity is a strong risk factor for many different diseases including cardiovascular disease and cancer, any new therapy in this space could have widespread benefits."
The drug works by blocking an enzyme called ceramide synthase 1 (CerS1).
Drug makes body burn fat instead of storing it
When this enzyme is stopped by the PO53 drug the body burns up fats like cholesterol and triglycerides, which come from foods, in muscles instead of storing them in fatty tissue.
Scientists do not fully understand the roles of different proteins which regulate people's metabolism – how the body burns fat.
And strong, suitable drugs for controlling fat production have been difficult to produce in the past.
But PO53 stops the activity of fat-producing enzyme CerS1 in its tracks, reducing fat across the whole body without effecting insulin resistance in mice fed on a high-fat diet.
'Our work so far has been a very important step'
Professor Turner and colleagues his believe it was due to the drug boosting the burning of fatty acids in the muscles of the animals.
Co-author Professor Anthony Don, of the University of Sydney, added: "From here, I would like to develop drugs which target both the CerS1 and [other] enzymes together, and see whether it produces a much stronger anti-obesity and insulin sensitising response.
"Although these drugs need more work before they are suitable for use in the clinic, our work so far has been a very important step in that direction."