A series of ten novel (2a–j) 4-arylidine 2-[4-methoxy phenyl] oxazol-5-one derivatives were synthesized and assayed in vivo to investigate their antidiabetic activities by streptozotocin-induced model in rat. These derivatives showed considerable biological efficacy when compared to rosiglitazone, a potent and well-known antidiabetic agent as a reference drug. All the compounds were effective, amongst them 2d shows more prominent activity at 50 mg/k.g.p.o. The experimental results are statistically significant at P < 0.01 level.