We studied the effect of pioglitazone on the transcription of 42 genes associated with diabetes to examine the relationship between the antidiabetic action of thiazolidinediones (TZDs) and their ability to modulate transcription through their peroxisome proliferater-activated receptor (PPAR)-agonistic activity. Diabetic (db/db) mice were orally administered with pioglitazone for two weeks. Total RNA was prepared from liver, muscle and adipocytes and the quantity of mRNA was determined by comparative RT-PCR. The expression of diabetes-related genes was compared between lean and untreated db/db mice and between untreated and drug-treated db/db mice. The onset of diabetes was associated with a considerable alteration in the expression of a large number of diabetes-related genes. Treatment of db/db mice with pioglitazone modulated the expression of genes involved in the metabolism of glucose, lipids and lipoproteins. This included genes for phosphoenolpyruvate carboxykinase, beta-oxidation enzymes, lipoprotein lipase, apolipoprotein AI and uncoupling proteins. Most of the genes responsible for insulin signaling were unaffected. Administration of pioglitazone was also shown to induce PPARgamma expression in liver and muscle. It is therefore possible to hypothesize that TZDs may ameliorate diabetes through a mechanism of action involving a direct decrease in plasma glucose and triglyceride levels and improvements in free fatty acid-induced insulin resistance.