C-phenyl 1-thioglucitol compounds of the following formula (I) or pharmaceutically acceptable salts thereof or hydrates thereof:[whereinX represents a hydrogen atom or a C1-6 alkyl group,Y represents a C1-6 alkylene group or -O-(CH2)n- (wherein n represents an integer of 1 to 5), andZ represents -CONHRA or -NHCONHRB (provided that when Z represents -NHCONHRB, n is not 1),whereinRA represents a C1-6 alkyl group substituted with 1 to 3 substituents selected from the group consisting of a hydroxyl group and -CONH2, andRB represents a hydrogen atom or a C1-6 alkyl group substituted with 1 to 3 substituents selected from the group consisting of a hydroxyl group and -CONH2] are useful as prophylactic or therapeutic agents for diabetes, because of their suppressive effect on sugar (e.g., glucose) absorption through inhibition of SGLT1 activity, or alternatively, because of their suppressive effect on sugar (e.g., glucose) absorption and excretory effect on urinary sugars through inhibition of both SGLT1 and SGLT2 activities.