A potentially important new drug for treating type 2 diabetes, tagatose, is now in phase 3 clinical trial. The history, development, additional health benefits, mechanisms of action and the potential for the drug are presented in context with a review of the rapidly growing epidemic of type 2 diabetes and treatments for it. An epimer of fructose, the natural hexose tagatose was originally developed by Spherix Incorporated (formerly Biospherics Inc.) as a low-calorie sugar substitute. Only 20% of orally ingested tagatose is fully metabolized, principally in the liver, following a metabolic pathway identical to that of fructose. Following a decade of studies, tagatose became generally recognized as safe for use in foods and beverages under US FDA regulation. The simple sugar is commercially produced by isomerization of galactose, which is prepared from lactose. Early human studies suggested tagatose as a potential antidiabetic drug through its beneficial effects on postprandial hyperglycaemia and hyperinsulinaemia. A subsequent 14-month trial confirmed its potential for treating type 2 diabetes, and tagatose showed promise for inducing weight loss and raising high-density lipoprotein cholesterol, both important to the control of diabetes and constituting benefits independent of the disease. Furthermore, tagatose was shown to be an antioxidant and a prebiotic, both properties cited in the maintenance and promotion of health. No current therapies for type 2 diabetes provide these multiple health benefits. The predominant side effects of tagatose are gastrointestinal disturbances associated with excessive consumption, generally accommodated within 1- to 2-week period. The health and use potentials for tagatose (branded Naturlose((R)) for this use) are given with respect to current type 2 diabetes drugs and markets. Under an FDA-affirmed protocol, Spherix is currently conducting a phase 3 trial to evaluate a placebo-subtracted treatment effect based on a decrease in HbA(1c) levels. Side effects, contraindications and possibly beneficial new findings will be carefully monitored. It is hoped that early results of the trial may become available by mid-2008. If a subsequent NDA is successful, tagatose may fill a major health need.