Abstract To test the effects of the PPAR-γ agonist pioglitazone on cognition, regional cerebral blood flow (rCBF), and plasma levels of Aβ40 and Aβ42, we conducted a 6-month, randomized, open-controlled trial in patients with mild Alzheimer disease (AD) accompanied with type II diabetes mellitus. We randomly assigned 42 patients to either the group treated with 15–30 mg pioglitazone daily ( n = 21, pioglitazone group) or not ( n = 21, control group). The pioglitazone group improved cognition and rCBF in the parietal lobe, while the control group showed no such improvement. The plasma Aβ40/Aβ42 ratio increased in the control group, but showed no significant change in the pioglitazone group. Both groups showed good control of diabetes during the study. In addition, pioglitazone treatment resulted in a decrease in fasting plasma insulin levels, indicating enhanced insulin sensitivity. The results of this pilot study demonstrated that pioglitazone exhibited cognitive and functional improvements, and stabilization of the disease in diabetic patients with AD. Pioglitazone may offer a novel strategy for the treatment of AD.