The clinical efficacy of troglitazone, a new oral hypoglycaemic agent was investigated in Type 2 diabetes in combination with sulphonylureas. Two hundred and ninety‐one patients with Type 2 diabetes (age 21–81 years) whose previous glycaemic control by sulphonylureas was judged stable but unsatisfactory (fasting plasma glucose (FPG) > 8.3 mmol l−1) were randomly allocated into the troglitazone treatment group (troglitazone group, n = 145) or the placebo treatment group (placebo group, n = 146). They were treated by test drugs for 12 weeks in combination with the same dose of sulphonylureas before the trial. One hundred and twenty‐two patients who received troglitazone and 126 patients who received placebo were evaluated for efficacy. The baseline characteristics did not differ significantly between the two groups. In the troglitazone group, FPG and HbA1C decreased significantly after the treatment (before vs after, FPG: 10.8 ± 2.0 mmol l−1 vs 9.2 ± 2.5 mmol l−1, p < 0.001; HbA1C: 9.2 ± 1.4 % vs 8.5 ± 1.5 %, p < 0.001). FPG and HbA1C did not change after the treatment in the placebo group (before vs after, FPG: 10.5 ± 1.7 mmol l−1 vs 10.7 ± 2.2 mmol l−1; HbA1C: 9.0 ± 1.5 % vs 9.2 ± 1.6 %). Serum total cholesterol and HDL‐cholesterol did not change in either group, however, serum triglyceride significantly decreased in the troglitazone group. No serious adverse events occurred in either group. In conclusion, troglitazone 400 mg day−1 had a significant hypoglycaemic effect in combination with sulphonylureas without any serious adverse events. Troglitazone, developed as an insulin action enhancer, can be a useful hypoglycaemic agent in the treatment of patients with Type 2 diabetes who are not well controlled by sulphonylureas alone.