Pioglitazone is an orally administered insulin sensitising thiazolidinedione agent that has been developed for the treatment of type 2 diabetes mellitus. Pioglitazone activates the nuclear peroxisome proliferator activated receptor-gamma (PPAR-gamma), which leads to the increased transcription of various proteins regulating glucose and lipid metabolism. These proteins amplify the post-receptor actions of insulin in the liver and peripheral tissues, which leads to improved glycaemic control with no increase in the endogenous secretion of insulin. In placebo-controlled clinical trials, monotherapy with pioglitazone 15 to 45 mg/day has been shown to decrease blood glycosylated haemoglobin (HbA1c) levels in patients with type 2 diabetes mellitus. The addition of pioglitazone 30 mg/day to preexisting therapy with metformin, or of pioglitazone 15 or 30 mg/day to sulphonylurea, insulin or voglibose therapy, has been shown to decrease HbA1c and fasting blood glucose levels significantly in patients with poorly controlled type 2 diabetes mellitus. Pioglitazone has also been associated with improvements in serum lipid profiles in randomised placebo-controlled clinical studies. The drug has been well tolerated by adult patients of all ages in clinical studies. Oedema has been reported with monotherapy, and pooled data have shown hypoglycaemia in 2 to 15% of patients after the addition of pioglitazone to sulphonylurea or insulin treatment. There have been no reports of hepatotoxicity.