It is known that endoplasmic reticulum (ER) stress is provoked under diabetic conditions and is possibly involved in the development of insulin resistance. In this study, using ER stress-activated indicator (ERAI) transgenic mice which express green fluorescent protein under ER stress conditions, we directly evaluated the effects of a diabetic agent pioglitazone on in vivo ER stress under diabetic conditions. In high fat and high sucrose diet-induced diabetic ERAI transgenic mice, 8 weeks of pioglitazone treatment reduced the accumulation of fat droplets in the liver and attenuated the development of insulin resistance. In the liver of the ERAI transgenic mice, ERAI fluorescence activity was clearly reduced as early as after 4 weeks of pioglitazone treatment, preceding the improvement of insulin resistance. In addition, after the pioglitazone treatment, serum free fatty acid and triglyceride levels were decreased, and serum adiponectin levels were increased. These data indicate that pioglitazone treatment suppresses ER stress in the liver which may explain, at least in part, the pharmacological effects of pioglitazone to reduce insulin resistance.