Thiazolidinediones (TZDs) are a new class of antidiabetic drugs, having an insulin sensitizing effect in patients with type 2 diabetes. The contribution of oxidative stress from the standpoint of lipid and protein damage, alteration in endogenous antioxidant enzymes and effects of newly synthesized compounds, 5-[4-2-(6,7-Dimethyl-1,2,3,4-tetrahydro-2-oxo-4-quinoxalinyl)ethoxy]phenyl]methylene]thiazolid- ine-2,4-dione, (C1) in normal/alloxan-induced diabetic rats form the focus area of this study. Its effect was compared to two well-known TZDs, namely pioglitazone and rosiglitazone. It has been concluded from results that after thirty days of administration of C1, Pg and Rg in alloxan-induced diabetic animal groups, the blood glucose level decreased, more remarkably in C1 treated group. Also oxidative damage has been studied by estimating hepatic superoxide dismutase (SOD) activity, which was found to be increased (p < 0.001 vs. control). An inverse change in SOD values between hepatic and pancreatic/kidney tissues were observed. Treatment with the test compounds lowered the activity of SOD in liver while increased its activity in kidney and pancreas. Similar normalizing effect of C1 on liver, pancreatic and renal catalase (CAT)/ glutathione peroxidase (GPx) activities were pronounced in diabetic rats (p < 0.001 vs. diabetic rats). Decreased reduced glutathione (GSH) content, found in diabetic animals, was significantly elevated to normal levels by C1 treatment. The treatment with C1 also decreased the levels of nitric oxide and increased the activities of glutathione-s-transferase and glutathione reductase, as compared to diabetic animals. Evidence of oxidative damage to lipids and proteins was shown through the quantification of protein carbonyl (in tissues) and malondialdehyde levels (both serum and tissues). It was observed that the protein/lipid damage in diabetic rats was improved by treatment with C1. Total antioxidant activity (TAA) was found to be enhanced in C1 treated rats (p > 0.05 vs. group3, p < 0.001 vs. group2, p < 0.001 vs. group 4). These results suggest that the newly synthesized TZD derivative (C1) has a potential to act as antihyperglycemic and antioxidant agent. In addition, for all parameters checked, it has better efficacy than rosiglitazone and is as effective as pioglitazone.