Pioglitazone, one of thiazolidinediones, a peroxisome proliferator-activated receptor (PPAR)-gamma ligand, is known to have beneficial effects on macrovascular complications in diabetes, but the effect on diabetic neuropathy is not well addressed. We demonstrated the expression of PPAR-gamma in Schwann cells and vascular walls in peripheral nerve and then evaluated the effect of pioglitazone treatment for 12 weeks (10 mg/kg/day, orally) on neuropathy in streptozotocin-diabetic rats. At end, pioglitazone treatment improved nerve conduction delay in diabetic rats without affecting the expression of PPAR-gamma. Diabetic rats showed suppressed protein kinase C (PKC) activity of endoneurial membrane fraction with decreased expression of PKC-alpha. These alterations were normalized in the treated group. Enhanced expression of phosphorylated extracellular signal-regulated kinase detected in diabetic rats was inhibited by the treatment. Increased numbers of macrophages positive for ED-1 and 8-hydroxydeoxyguanosine-positive Schwann cells in diabetic rats were also corrected by the treatment. Pioglitazone lowered blood lipid levels of diabetic rats, but blood glucose and nerve sorbitol levels were not affected by the treatment. In conclusion, our study showed that pioglitazone was beneficial for experimental diabetic neuropathy via correction of impaired PKC pathway and proinflammatory process, independent of polyol pathway.