Pioglitazone is a thiazolidinedione. As a PPAR-gamma agonist it alters the expression of a number of genes, resulting in a reduction in insulin resistance. Clinical trial data involving over 4500 patients with type 2 diabetes suggest it is effective both as monotherapy and in combination with sulphonylureas, metformin and insulin, producing both significant falls in HbA1c and favourable improvements in lipid parameters. It is well tolerated, with a low incidence of side-effects. Unlike troglitazone, its use has not been associated with hepatotoxicity. It has recently been licensed in the US for use as monotherapy and in combination with insulin, metformin and sulphonylureas. Its European license is more restrictive, allowing use in combination with metformin, and in combination with sulphonylureas in those intolerant of metformin. It provides a useful new option in the treatment of type 2 diabetes mellitus.