Introduction: In India, the number of people with diabetes is increasing day-by-day. Due to a sole “Asian Indian Phenotype,” Indians develop diabetes an era earlier and have an earlier onset of complications. Hence, it is essential to evaluate earlier stage of disease progression. Prediabetes, typically defined as blood glucose levels above normal but below the thresholds of diagnosis of diabetes, is a risk state that defines a high chance of developing diabetes. Methods: The present study was Prospective, open label, comparative, randomized, parallel group, single center study conducted at Department of General Medicine, Shadan Institute of Medical Sciences, Teaching Hospital & Research Centre, Hyderabad. Comparison of two active treatment groups over a period of six months. Sixty patients of either sex in the age of more than 40 years with prediabetes, with HbAlc in the range of 5.7 to 6.4 % at screening as per ADA. The effect of metformin and pioglitazone were observed on various parameters i.e. Serum Insulin, FBG, HbA1c, HOMA-IR. Results: In metformin group the mean change in HOMA-IR from baseline to 6 months was 3.44 to 2.21 (-1.23); on the other hand, in Pioglitazone group from baseline to 6 months was 3.30 to 1.91 (-1.39). Whereas, serum insulin from 37.65 to 28.75 (-8.9) in metformin group; in Pioglitazone group from 37.43 to 23.75 (-13.68). Pioglitazone statistically highly significant than metformin group in improving glycemic indices. Conclusions: Though metformin and pioglitazone were equally effective in improving glycemic indices yet pioglitazone showed better results in improving Serum Insulin, FBG, HbA1c, HOMA-IR as compared with Metformin. Pioglitazone had minimal side effects as compared to Metformin