OBJECTIVE This study was designed to compare effectiveness and remission rate between gliclazide and insulin as initial treatment in newly diagnosed, drug-naive patients with type 2 diabetes. METHODS Newly diagnosed, drug-naive subjects with type 2 diabetes having mean fasting blood glucose >200 mg/dL were enrolled into either of two groups (gliclazide or insulin). The former received gliclazide modified-release 60 mg daily, while the insulin group received 16 units of premixed insulin as two divided doses along with medical nutrition therapy. Premeal blood glucose was monitored, and the dose was adjusted accordingly. Glycosylated hemoglobin (HbA1c), lipid profile, and postmeal C-peptide were estimated at baseline and 6 months. Remission was defined as euglycemia off drug for a minimum duration of 1 month. RESULTS Baseline and 6-month blood glucose, HbA1c, and lipid profile were comparable between groups. Blood glucose levels normalized in 2-6 weeks in both groups. At 6 months, one of 30 (3.33%) in the gliclazide group and 24 of 30 (80%) in the insulin group were in remission. Ten of 16 (62.5%) in the insulin group and one of 20 (.5%) in the gliclazide group continued to maintain euglycemia off all pharmacological treatment at 12 months. At 6 months, C-peptide increased in the insulin group (3.21+/-1.61 ng/mL at baseline vs. 5.82+/-2.23 ng/mL at 6 months), while it remained unchanged in the gliclazide group (3.4+/-1.87 ng/mL at baseline vs. 3.82+/-1.78 ng/mL at 6 months) (P=0.0003). CONCLUSIONS Comparable glycemic control could be achieved with both insulin and oral hypoglycemic agent in newly diagnosed type 2 diabetes subjects. Insulin treatment exceeded gliclazide in the remission (drug-free) rate.