Troglitazone, a new antihyperglycemic agent, is approved for use alone, with oral sulfonylureas, or with insulin in the treatment of type II diabetes mellitus. Rather than stimulating insulin secretion, it enhances insulin sensitivity. Potential advantages of troglitazone over oral sulfonylureas include decreased endogenous insulin concentrations, decreased exogenous insulin requirements, reduced hypoglycemic risk, and convenient once/day administration. The effect on morbidity and mortality from lowering endogenous and exogenous insulin concentrations remains to be determined. Troglitazone also has potential disadvantages. It induces cytochrome P450 isoenzyme 3A4, although few drug interactions have been identified to date. Serum transaminases must be monitored routinely because of rarely reported cases of idiosyncratic hepatocellular injury. In addition, the cost of troglitazone is much higher than that of other oral antihyperglycemic agents or insulin. Given the available information, troglitazone has limited benefit over oral sulfonylureas or metformin as monotherapy or in combination with oral sulfonylureas. Until additional combination and comparative studies have been done, the agent should be reserved for patients with poor glycemic control receiving high daily doses of insulin.