Evidence suggests that diabetes and cardiovascular disease (CVD) may share an underlying cause(s), a theory known as the 'common soil' hypothesis. Insulin resistance is central both to the progression from normal glucose tolerance to type 2 diabetes and to a constellation of cardiovascular risk factors known as the metabolic syndrome. These risk factors include visceral obesity and dyslipidaemia characterized by low levels of high-density lipoprotein cholesterol, hypertriglyceridaemia and raised small dense low-density lipoprotein particle levels. Changes in adipose tissue mass and metabolism may link insulin resistance and visceral obesity, a condition that is common in type 2 diabetes. Furthermore, weight reduction, increased physical activity, metformin and acarbose have been shown to reduce the development of type 2 diabetes in genetically predisposed subjects and may decrease the high cardiovascular risk of patients with diabetes. Some fatty acid derivatives can affect energy metabolism by activating peroxisome proliferator-activated receptors (PPARs), nuclear receptors that play a key role in energy homeostasis. These receptors represent an ideal therapeutic target for reducing cardiovascular risk, because they are involved in the regulation of both insulin action and lipid metabolism. In addition to lifestyle changes, PPARgamma agonists such as thiazolidinediones are frequently beneficial and have been shown to ameliorate insulin resistance, while activation of PPARalpha (e.g. by fibrates) can lead to improvements in free fatty acid oxidation and lipid profile, and a reduction in cardiovascular events. The development of agents with both PPARalpha and PPARgamma activity promises added benefits with amelioration of insulin resistance, delayed progression to and of type 2 diabetes and a reduction of CVD.