Thiazolidinediones are a new class of drugs for the treatment of type 2 diabetes, and act by improving insulin sensitivity in adipose tissue, liver and skeletal muscle. Rosiglitazone and pioglitazone are registered for use in monotherapy, and in combination with sulfonylureas and metformin. Pioglitazone is also licensed for use in combination with insulin. There is level II evidence that in patients with inadequate glycaemic control both drugs reduce the level of HbA1c and fasting plasma glucose (FPG) when used as monotherapy and in combination with sulfonylurea or metformin or insulin; and both drugs increase levels of HDL and LDL and lower free fatty acid levels, but only pioglitazone significantly lowers triglyceride levels. Both drugs lower fasting insulin and C-peptide levels. In monotherapy, they may be slightly less potent at reducing the level of HbA1c than sulfonylureas or metformin. The maximal effect of these agents may not be seen for 6-14 weeks after commencement. Both drugs are well tolerated but liver function must be checked at baseline every second month for the first year, and periodically thereafter. The drugs are currently contraindicated in patients with moderate to severe liver dysfunction and alanine aminotransferase levels more than 2.5 times normal, New York Heart Association III-IV cardiac status, pregnancy, lactation and in children. The main side effects include weight gain, oedema, and mild dilutional anaemia.