Oestrogen replacement therapy is associated with a decreased risk of cardiovascular disease in postmenopausal women. Patients with non-insulin-dependent diabetes mellitus (NIDDM) have an increased cardiovascular risk. However, oestrogen replacement therapy is only reluctantly prescribed for patients with NIDDM. In a double blind randomized placebo controlled trial we assessed the effect of oral 17 beta-estradiol during 6 weeks in 40 postmenopausal women with NIDDM. Glycated haemoglobin (HbA1c), insulin sensitivity, suppressibility of hepatic glucose production, lipoprotein profile and parameters of fibrinolysis were determined. The oestrogen treated group demonstrated a significant decrease of HbA1c and in the normotriglyceridaemic group a significantly increased suppression of hepatic glucose production by insulin. Whole body glucose uptake and concentrations of non-esterified fatty acids did not change. LDL-cholesterol- and apolipoprotein B levels decreased, and HDL-cholesterol, its subfraction HDL2-cholesterol and apolipotrotein A1 increased. The plasma triglyceride level remained similar in both groups. Both the concentration of plasminogen activator inhibitor-1 antigen and its active subfraction decreased. Tissue type plasminogen activator activity increased significantly only in the normotriglyceridaemic group. Oestrogen replacement therapy improves insulin sensitivity in liver, glycaemic control, lipoprotein profile and fibrinolysis in postmenopausal women with NIDDM. For a definite answer as to whether oestrogens can be more liberally used in NIDDM patients, long term studies including the effect of progestogens are necessary.