Based on the structural characters of PPAR modulators, a virtual combinatorial library containing 1226,625 compounds was constructed using SMILES strings. Selected ADME filters were employed to compel compounds having poor drug-like properties from this library. This library was converted to sdf and mol2 files by CONCORD 4.0, and was then docked to PPARgamma by DOCK 4.0 to identify new chemical entities that may be potential drug leads against type 2 diabetes and other metabolic diseases. The method to construct virtual combinatorial library using SMILES strings was further visualized by Visual Basic.net that can facilitate the needs of generating other type virtual combinatorial libraries.