The present invention relates to novel crystalline Form of 5-[4-[[3-methyl-4-oxo-3,4-dihydroquinazolin-2-yl]methoxy]benzyl]thiazolid- ine-2,4-dione potassium salt having the formula (I). The invention also relates to a pharmaceutical composition comprising the novel crystalline Form and a pharmaceutically acceptable carrier. The novel crystalline Form of the present invention is more active, as an antidiabetic agent than the hitherto known 5-[4-[[3-methyl-4-oxo-3,4-dihydroquinazolin-2-yl]- methoxy]benzyl]thiazolidine-2,4-dione potassium salt