(FORTUNE Magazine) – Union Pacific Railroad has long known that many of its 48,000 employees--mostly middle-aged men--are overweight. That can be a dangerous problem for people who ply the rails. So 16 years ago the Omaha company began a massive program to help workers improve their health and shed pounds. UP has devoted so much time and money to this effort, in fact--$2 million last year alone--that it has won a slew of national health awards. The result? Employee smoking rates, cholesterol levels, and blood pressure are down. Yet the workforce is fatter than ever. UP's story shows just how tough it is for any employer to help its people slim down.

Back in the late 1980s, UP's medical costs per employee were almost double the national average. Lack of fitness, the company concluded, was a major reason. (A 1995 survey by UP showed that 40% of its employees were obese, well above that year's national average of 15%.) Helping employees lose weight "wasn't just something good to do," says CEO Dick Davidson. "It also became good business."

So in 1987, UP opened an 8,000-square-foot gym at headquarters that offered everything from treadmills to advice from exercise specialists. Later the railroad cut deals with 450 gyms around the country to give free access to employees scattered across 23 states. Meanwhile, Dennis Richling, a staff physician UP had asked to head its health-improvement program, was devising other ways to help employees lighten up. For example, Richling's team established a peer-to-peer mentoring program for overweight employees.

But from 1995 to 2001 the percentage of obese UP employees rose from 40% to 52%. How is that possible? For one thing, no company can insulate its workers from the pervasive temptations of fast food and other high-fat, high-calorie treats. For another, no company can force an employee to embark on a weight-loss program. According to marketing studies, 10% to 20% of any group are "resisters." UP reluctantly gave up trying to convert those people. Says Richling: "It just isn't cost-effective."

Instead his team redoubled its efforts with employees who seemed most motivated to change. Last year the group started referring some obese employees to an outside program that provides individual counseling and a tailored weight-loss plan. It began offering the powerful diet drug Meridia to 150 obese employees free. It even arranged to have bowls of apples set out around headquarters to encourage healthy snacking.

Are these steps working? It's too soon to tell. But UP execs argue that their overall health program saves them $50 million a year in medical costs. And they take heart from individual success stories. On an icy weekday afternoon, for example, James Blair, a 57-year-old real estate analyst, is in the midst of 400 or so crunches in UP's main gym--a sliver of his daily two-hour workout. Sixteen months ago he started a "modified Atkins diet" with an intense fitness component. He's lost 98 pounds.

Still, only one person, signal technician Bob Johnson, shows up for the 4:30 yoga class. "Our people are no different from what you see in society," sighs Joseph Leutzinger, UP's director of health promotion. "And that's our challenge."