Pioglitazone is an insulin-sensitizing agent that has been reported to have anti-arteriosclerotic effects. The aim of this study was to obtain a better understanding of the mechanism involved in the insulin sensitizing effect of pioglitazone. A total of 50 newly diagnosed patients with type 2 diabetes were enrolled in this study and divided into two groups, 25 of who were treated with 15 mg/day pioglitazone and 25 with 500 mg/day metformin for 12 weeks. Changes in various parameters of insulin resistance including lipoprotein subclass according to particle size determined by high performance liquid chromatography, as well as glucose metabolism, were monitored to determine the relationship between lipoprotein subclass and other insulin resistance parameters. Both pioglitazone and metformin treatment were associated with significant reductions in hyperglycemia, HOMA-IR and HbA1c levels. Pioglitazone treatment, but not metformin treatment resulted in significant reductions in serum large very low-density lipoprotein (VLDL: 44.5-64.0 nm) and increases in serum adiponectin levels (both <0.001). In the pioglitazone group, the change in large VLDL levels correlated positively with changes in HbA1c (r=0.468, P=0.0174), HOMA-IR (r=0.593, P=0.0014), very small LDL (r=0.714, P<0.0001) and net electronegative charged modified-LDL (r=0.412, P=0.0399), and inversely with changes in adiponectin level (r=-0.526, P=0.0061). The results in this study suggest that the hypoglycemic effect of pioglitazone is achieved mainly through improvement of hepatic insulin resistance, and that pioglitazone may have an antiatherosclerotic effect by decreasing serum atherogenic modified-LDL and by increasing adiponectin.