Failure to attain and sustain long term glycemic control is an ongoing challenge in diabetes therapy. The trend to use a combined therapy and the risk of drug-drug interaction (DDI) are elevated and thus the need for sensitive analytical methods is of great significance. Herein, a simple, robust, and sensitive reverse phase high performance liquid chromatography-electrospray ionization-tandem mass spectrometry (ESI-MS/MS) method for simultaneous determination of metformin (MET) and pioglitazone (PGT) in rat plasma using canagliflozin (CAN) as internal standards (IS) was developed and fully validated. Prior Chromatographic separation on an Agilent Eclipse Plus C18 (4.6 × 100 mm, 3.5 μm) using gradient mobile phase system consisting of ammonium formate pH 4.5 and acetonitrile at a flow rate of 0.5 mL min-1, within a run time of 14 min, the antidiabetic drugs were extracted from rat plasma using acetonitrile-induced protein precipitation technique. Multiple reaction monitoring in positive ion mode was used for quantitation of precursor to production at m/z 130.1 → 71.0 & 60 for MET, 357.2 → 134.2 for PGT, and 462.16 → 191.1 for CAN. Method linearity was obeyed in the range of 1 to 5000 and 1 to 2500 ng mL-1 for MET and PGT, respectively. The developed method was validated in terms of accuracy, precision, selectivity, recovery, matrix effects, and stability as per US-FDA bioanalytical guidelines and successfully applied to clinical pharmacokinetic and DDI studies with a single oral administration of target compounds. The peak plasma concentrations (Cmax) and area under the concentration-time curve (AUC) of MET was significantly influenced by the concomitant administration of PGT at equal concentration and vice versa. PGT affected the absorption and elimination rate of MET via inhibition of organic cationic transporter (OCT). Molecular modeling study revealed the significant interaction of PGT with OCT. A potential DDI in type 2 diabetic patient receiving chronic treatment with MET and PGT deserves further attention and study to improve drug therapy and prevent adverse effects.