The prospective observational study was designed to identify factors affecting glycemic control with pioglitazone and to confirm the hepatic safety of the drug in patients with type 2 diabetes. Baseline patient characteristics, changes in serum hemoglobin A1c (A1c) and alanine aminotransferase (ALT), other treatments for diabetes mellitus, and hepatobiliary adverse reactions were examined. In total, 24,993 patients, representing 28,008 patient-years, were included in the safety evaluation and 20,447 patients in the efficacy evaluation. No case of hepatic failure was reported, and neither temporal nor dose relations were found between pioglitazone and ALT abnormalities. Serum A1c was clearly reduced in patients with baseline body mass index <25 kg/m(2) or baseline fasting immunoreactive insulin <5.0 microU/mL. Among the patients treated for more than 6 months, the change in A1c was -1.0% at 6 months with both monotherapy and combination therapy and remained stable up to 18 months. The overall rate of achievement of A1c<7% in patients with baseline A1c above 7% was 34.1%; notably, the achievement rate of A1c<7% was approximately 30% even in patients with high baseline A1c (mean 8.8%) taking multiple antidiabetic medications, including sulfonylurea, for whom insulin therapy is usually indicated in Japan.