The thiazolidinediones (TZDs) rosiglitazone and pioglitazone are new oral antidiabetic agents with `insulin sensitising' activity for the treatment of type 2 diabetes. Rosiglitazone and pioglitazone produce a slowly generated antihyperglycaemic effect which is often accompanied by decreases in circulating insulin and free fatty acids. Circulating triglycerides may also decline, while low-density and high-density lipoprotein cholesterol concentrations are either unchanged or slightly increased, with little alteration to their ratio. The blood glucose-lowering efficacy of TZDs is typically additive or possibly more than additive to the effects of other classes of antidiabetic agents. In Europe rosiglitazone and pioglitazone can be used in combination with metformin or a sulphonylurea, whilst in the USA these TZDs can also be prescribed as monotherapy and pioglitazone in combination with insulin. Because TZDs tend to cause fluid retention they are excluded for patients with cardiac insufficiency. TZDs act via the nuclear peroxisome proliferator-activated receptor-gamma (PPARγ), which mediates the transcription of certain genes that are also responsive to insulin, enabling these agents to improve insulin action.