The prevalence of gastric ulcers is high in cholestatic patients, but the exact mechanism of this increased frequency remains uncertain. It has been shown that pioglitazone accelerates the healing of pre-existing gastric ulcers. The present study was designed to investigate the effect of pioglitazone, on the gastric mucosal lesions in cholestatic rats. Cholestasis was induced by surgical ligation of common bile duct and sham-operated rats served as control. Different groups of sham and cholestatic animals received solvent or pioglitazone (5, 15, 30 mg/kg) for 7 days. On the day eight rats were killed after oral ethanol administration and the area of gastric lesions was measured. The serums of rats were also collected to determine serum levels of tumour necrosis factor alpha (TNF-α), IL-1β and bilirubin. The ethanol-induced gastric mucosal damage was significantly more severe in cholestatic rats than sham-operated ones. Pretreatment with pioglitazone dose-dependently attenuated gastric lesions induced by ethanol in both sham and cholestatic rats, but this effect was more prominent in cholestatic ones. The effect of pioglitazone was associated with a significant fall in serum levels of TNF-α in cholestatic rats. L-NAME, a non-selective nitric oxide synthase (NOS) inhibitor, and decreased pioglitazone-induced gastroprotective effect in cholestatic rats, while aminoguanidine, a selective inducible NOS inhibitor, potentiated pioglitazone-induced gastroprotective effect in the cholestatic rats. Chronic treatment with pioglitazone exerts an enhanced gastroprotective effect on the stomach ulcers of cholestatic rats compared to sham rats probably due to constitutive NOS induction and/or inducible NOS inhibition and attenuating release of TNF-α.