A therapeutic or prophylactic agent for diabetes comprising a thiazolidine derivative as a PPAR-γ agonist as an effective component, which agent shows a reduced side effect of the PPAR-γ agonist, is disclosed. The therapeutic or prophylactic agent for diabetes comprises a particular IP agonist such as beraprost sodium (BPS), and a thiazolidine derivative such as pioglitazone or a pharmaceutically acceptable salt thereof. Since the therapeutic or prophylactic agent of the present invention shows a sufficiently effective hypoglycemic action without being accompanied by side effects characteristic to PPAR-γ agonists (e.g., body weight gain), the agent is useful as a highly safe and effective therapeutic or prophylactic agent for diabetes.