The association of the Pro12Ala polymorphism of the PPAR-gamma2 gene with the incidence of type 2 diabetes was investigated in 522 subjects with impaired glucose tolerance (IGT) participating in the Finnish Diabetes Prevention Study. Subjects were randomized to either an intensive diet and exercise group or a control group. By 3 years of intervention, the odds ratio of the development of type 2 diabetes for subjects with the Ala12 allele was 2.11-fold compared with that for subjects with the Pro12Pro genotype (95% CI 1.20-3.72). The risk for type 2 diabetes increased also in subjects who gained weight or belonged to the control group. In the intervention group, subjects with the Ala12Ala genotype lost more weight during the follow-up than subjects with other genotypes (Pro12Pro vs. Ala12Ala P = 0.043), and none of subjects with the Ala12Ala genotype developed type 2 diabetes in this group. In conclusion, the Ala12 allele may predispose to the development of type 2 diabetes in obese subjects with IGT. However, beneficial changes in diet, increases in physical activity, and weight loss may reverse, to some extent, the diabetogenic impact of the Ala12 allele, possibly due to an improved insulin sensitivity.