Numerical simulation of time-periodic problems is a special area of research, since the time periodicity modifies the problem structure, and then it is desirable to use parallel methods to solve such problems. The classical parareal algorithm for time-periodic problems, which is parallel in time, solving an initial value coarse problem, called the periodic parareal algorithm with initial value coarse problem (PP-IC), usually converges very slowly, and even diverges for wave propagation problems. In this paper, we first present a new PP-IC algorithm based on a diagonalization technique proposed recently. In this new algorithm, we approximate the coarse propagator $G$ in the classical PP-IC algorithm with a head-tail coupled condition such that $G$ can be parallelized using diagonalization in time. We analyze the convergence factors of the diagonalization-based PP-IC algorithm for both the linear and nonlinear cases. Then, we further design and analyze a new parallel-in-time algorithm for time-periodic problems by combining the Krylov subspace method with the diagonalization-based PP-IC algorithm to accelerate the convergence. Finally, we also determine an appropriate choice of the parameter $α$ in the head-tail coupling condition, and illustrate our theoretical results with several numerical experiments, both for model problems and the realistic application of Maxwell’s equations.