Benzothiazole derivatives of thiazolidinediones (TZD) were synthesized using a modified Mitsunobu reaction of 2-(benzothiazol-2-ylmethylamino)ethanol (2) with 5-(4-hydroxybenzyl)-3-triphenylmethylthiazolidine-2,4-dione and assayed for activity on peroxisome proliferator-activated receptor (PPAR) subtypes and inhibitory activity of NO production in lipopolysaccharide-activated macrophages. Most of the tested compounds were identified as potent $PPAR_gamma$ agonists, indicating their potential as drug candidates for diabetes.