Type 2 diabetes mellitus is characterised by insulin resistance as well as progressive pancreatic beta cell dysfunction. The cornerstone of current oral blood-glucose lowering therapy consists of metformin, which primarily lowers hepatic glucose production, and the sulphonylureas that act by stimulating pancreatic beta-cells to secrete insulin. Recently, a novel class of agents, the thiazolidinediones, has been introduced that favourably influence insulin sensitivity and possibly also pancreatic beta-cell function. The thiazolidinediones are synthetic ligands that bind to the nuclear peroxisome proliferator-activated receptor-gamma and exert their action by activating transcription of genes that, among others, regulate adipocyte differentiation and adipogenesis as well as glucose and lipid metabolism. To date, the precise mechanisms underlying the actions of thiazolidinediones are largely unknown. When given as monotherapy or in combination with sulphonylureas, metformin or insulin in patients with type 2 diabetes, the currently available thiazolidinediones (rosiglitazone and pioglitazone) ameliorate glycaemic control, by lowering fasting and postprandial blood glucose levels, and improve insulin sensitivity in placebo-controlled trials. They seem to have differential effects on dyslipidaemia in patients with type 2 diabetes; rosiglitazone increases total cholesterol as well as high-density lipoprotein (HDL) and low-density lipoprotein cholesterol levels and affects plasma triglyceride levels depending on the baseline values, whereas pioglitazone lowers triglycerides and increases HDL cholesterol levels. The adverse events of both agents that occur with greater frequency than in patients treated with placebo are fluid retention and oedema. As demonstrated, mainly in preclinical studies to date, rosiglitazone and pioglitazone possess beneficial effects on other cardiovascular risk factors associated with the insulin resistance syndrome. Thus, these agents were shown to decrease blood pressure, enhance myocardial function and fibrinolysis, as well as possess anti-inflammatory and other beneficial vascular effects. Long-term efficacy and surveillance of this promising class of drugs in patients, however, still need to be demonstrated in outcome trials.