Individuals with type 2 diabetes have two defects: insulin resistance, which occurs in the first stages of disease progression, and pancreatic beta-cell failure, which occurs later in the disease. Insulin resistance is the major pathological defect. During the course of the disease, insulin levels are initially elevated to compensate for the increased insulin resistance and then decline as the disease progresses and beta-cells become less responsive. It is necessary to change antidiabetic therapies to address this progression. Current management of type 2 diabetes follows a stepwise treatment program of diet and exercise, monotherapy with oral antidiabetic agents, combination oral therapy and, ultimately, combination therapy with insulin to control blood glucose levels. While control of blood glucose will reduce the risk of microvascular complications, such as microalbuminuria and retinopathy, the incidence of macrovascular complications is not significantly reduced. The introduction of the thiazolidinediones (TZDs) or 'glitazones', a class of agents that offer effective glycemic control and work through the reduction of insulin resistance, offers a new strategy in the management of this condition. These agents have beneficial effects on the pancreatic beta-cell and, in addition, may have potential benefits on the macrovascular complications that commonly occur in these patients.