The purpose of this article is to provide a guide to the optimal use of insulin in type 2 (non-insulin-dependent) diabetes mellitus. Based on pathophysiological considerations and a knowledge of drug actions, an individualised, targeted strategy is selected for obtaining good metabolic control without compromising well-being and quality of life. The treatment should target hyperglycaemia along with other risk factors. Insulin is indicated when adequate glycaemia can no longer be obtained with diet and oral antihyperglycaemic agents. Commonly, the oral drugs are replaced by insulin, but preferably they should be used in combination with insulin. This approach can lead to improved glycaemic control, a reduced insulin dose and counteraction of insulin-associated bodyweight gain. There may also be less hypoglycaemia with combination insulin/oral therapy as compared with insulin monotherapy, as well as other benefits. Optimisation of oral drug therapy should be attempted before initiating insulin. A combination of insulin with a sulphonylurea agent is commonly used: the adjunctive effect of the sulphonylurea is dependent on pancreatic beta cell function. The combination of insulin with metformin or a thiazolidinedione is more logical as insulin resistance is targeted directly. Bedtime insulin plus metformin conferred the most benefits among several options investigated in a randomised 1-year study. The combination of insulin with acarbose is a further option when there is significant postprandial hyperglycaemia. It is recommended to start with a medium- to long-acting insulin preparation at bedtime or premixed insulin before the evening meal. Changes in insulin administration can be subsequently introduced as needed, e.g. use of twice-daily premixed insulin, multiple injections of rapid-acting insulin or insulin analogues. There are many options, but limited clinical data are available to support a number of the regimens.