Eighteen substituted thiophene and benzothiophene derivatives were studied for their effects on peroxisome proliferator-activated receptor gamma (PPARgamma) in HepG2 cells. Three derivatives (compounds 5, 120.97%; 15, 102.14%; and 17, 113.82%) were found to transactivate PPARgamma in vitro. By comparison, the positive control rosiglitazone (Ros) transactivated PPARgamma by 311.53%. The three compounds were studied for their effects on glucose metabolism in vivo in KK/Ay diabetic mice. In vivo, the 2-(beta-carbonyl/sulfonyl) butyryl-thiophene compounds 5 and 15 significantly decreased blood glucose levels (compounds 5, to<15.6mmol/L; 15, to<10mmol/L), improved glucose tolerance, improved impaired pancreatic islet beta-cells, and lowered serum insulin levels.