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Background: The discovery of novel ligand binding domain (LBD) of peroxisome proliferator- activated receptor γ (PPARγ) has recently attracted attention to few research groups in order to develop more potent and safer antidiabetic agents. Objective: This study is focused on docking-based design and synthesis of novel compounds combining benzothiazole and pyrazolidinedione scaffold as potential antidiabetic agents. Methods: Several benzothiazole-pyrazolidinedione hybrids were synthesized and tested for their in vivo anti-hyperglycemic activity. Interactions profile of title compounds against PPARγ was examined through molecular modelling approach. Results: All tested compounds exhibited anti-hyperglycemic activity similar or superior to the reference drug Rosiglitazone. Introducing chlorine atom and alkyl group at position-6 and -5 respectively on benzothiazole core resulted in enhancing the anti-hyperglycemic effect. Docking study revealed that such groups demonstrated favorable hydrophobic interactions with novel LBD Ω- pocket of PPARγ protein. Conclusion: Among the tested compounds, N-(6-chloro-5-methylbenzo[d]thiazol-2-yl-4-(4((3,5- dioxopyrazolidin-4-ylidene)methyl)phenoxy)butanamide 5b was found to be the most potent compound and provided valuable insights to further develop novel hybrids as anti-hyperglycemic agents.