With the understanding of type 2 diabetes mellitus constantly evolving, and with the introduction of many new agents during the past few years, it is often difficult to keep up to date with the management of type 2 diabetes. This article reviews the pathophysiology of type 2 diabetes, oral pharmacologic treatment, and proposed diabetes treatment algorithms, which aim to guide clinicians in the use of thiazolidinediones (TZDs) earlier in the course of diabetes. This is important because studies indicate that sulfonylureas, biguanides, and insulin do not protect the beta cell and cannot provide sustainable glycemic control. The basis for TZD use earlier in diabetes is 2-fold: to preserve beta-cell function while maintaining appropriate glycemic control for a longer duration than is usually attained through monotherapy with a secretagogue or biguanide, and to prevent or reverse the insulin resistance phenomenon of reduced insulin utilization that appears even prior to the clinical diagnosis of diabetes. Notably, decreasing insulin resistance also may reduce the incidence of adverse atherosclerotic consequences.