Thiazolidinediones are insulin-sensitizing compounds that reduce plasma glucose and improve the lipid profile of type 2 diabetic patients. We determined the effect of rosiglitazone in 15 type 2 diabetic patients and compared these results to 14 randomly assigned placebo patients. After 3 months, the urinary albumin to creatinine ratio was significantly decreased, while the glucose metabolic clearance rate, during insulin clamp, was significantly increased by rosiglitazone compared to the placebo group. Fasting free fatty acid and tumor necrosis factor-alpha (TNF-alpha) levels were significantly decreased, while the adiponectin concentration was significantly increased by rosiglitazone treatment. The percentage decrease in albuminuria correlated with the decrease in fasting plasma glucose, free fatty acids TNF-alpha and the increase in fat mass, plasma adiponectin, and glucose metabolic clearance rate. Stepwise linear regression analysis showed the decrease in TNF-alpha and the increase in adiponectin were independently associated with decreased albuminuria. Our study indicates that thiazolidinediones may be useful to prevent nephropathy in type 2 diabetic patients.