A series of [[(heterocyclyl)ethoxy]benzyl]-2,4-thiazolidinediones have been synthesized by the condensation of corresponding aldehyde 1 and 2,4-thiazolidinedione followed by hydrogenation. Both unsaturated thiazolidinedione 2 and its saturated counterpart 3 have shown antihyperglycemic activity. Many of these compounds have shown superior euglycemic and hypolipidemic activity compared to troglitazone (CS 045). The indole analogue DRF-2189 (3g) was found to be a very potent insulin sensitizer, comparable to BRL-49653 in genetically obese C57BL/6J-ob/ob and 57BL/KsJ-db/db mice. Pharmacokinetic and tissue distribution studies conducted on BRL-49653 and DRF-2189 (3g) indicate that these drugs are well-distributed in target tissues. On the basis of euglycemic activity as well as enhanced selectivity against reduction of triglycerides in plasma, DRF-2189 (3g) has been selected for further evaluation.