Peroxisome proliferator-activated receptor (PPAR)-gamma activators are widely used in the treatment of type 2 diabetes because they improve the sensitivity of insulin receptors. Punica granatum flower (PGF) has been used as an anti-diabetic medicine in Unani medicinal literature. The mechanism of actions is, however, unknown. In the current study, we demonstrated that 6-week oral administration of methanol extract from PGF (500 mg/kg, daily) inhibited glucose loading-induced increase of plasma glucose levels in Zucker diabetic fatty rats (ZDF), a genetic animal model for type 2 diabetes, whereas it did not inhibit the increase in Zucker lean rats (ZL). The treatment did not lower the plasma glucose levels in fasted ZDF and ZL rats. Furthermore, RT-PCR results demonstrated that the PGF extract treatment in ZDF rats enhanced cardiac PPAR-gamma mRNA expression and restored the down-regulated cardiac glucose transporter (GLUT)-4 (the insulin-dependent isoform of GLUTs) mRNA. These results suggest that the anti-diabetic activity of PGF extract may result from improved sensitivity of the insulin receptor. From the in vitro studies, we demonstrated that the PGF extract enhanced PPAR-gamma mRNA and protein expression and increased PPAR-gamma-dependent mRNA expression and activity of lipoprotein lipase in human THP-1-differentiated macrophage cells. Phytochemical investigation demonstrated that gallic acid in PGF extract is mostly responsible for this activity. Thus, our findings indicate that PPAR-gamma is a molecular target for PGF extract and its prominent component gallic acid, and provide a better understanding of the potential mechanism of the anti-diabetic action of PGF.