Aim: The aim of this study was to compare efficacy and tolerability of initial combination therapy with vildagliptin/ pioglitazone to component monotherapy. Methods: This 24-week, multicentre, randomized, double-blind, active-controlled study assessed the effects of the dipeptidyl peptidase-4 inhibitor vildagliptin (100 mg q.d.), pioglitazone (30 mg q.d.) and vildagliptin combined with pioglitazone (100/30 mg q.d. or 50/15 mg q.d.) in 607 drug-naive patients with type 2 diabetes (T2DM). The primary outcome measure was change from baseline in HbA 1c in patients receiving initial combination therapy compared with pioglitazone monotherapy. Results: After 24-week treatment, adjusted mean changes in HbA 1c from baseline (approximately 8.7%) in patients receiving pioglitazone monotherapy, 50/15 mg combination, 100/30 mg combination and vildagliptin monotherapy were ÿ1.4 AE 0.1%, ÿ1.7 AE 0.1%, ÿ1.9 AE 0.1% and ÿ1.1 AE 0.1% respectively. Both low-dose and high-dose combinations were significantly more efficacious than pioglitazone alone (p ¼ 0.039 and p < 0.001 respectively). Adjusted mean changes in fasting plasma glucose were ÿ1.9 AE 0.2, ÿ2.4 AE 0.2, ÿ2.8 AE 0.2 and ÿ1.3 AE 0.2 mmol/l respectively, and both combination groups were significantly more effective than pioglitazone monotherapy (p ¼ 0.022 and p < 0.001 respectively). The overall incidence of adverse events ranged from 45.8% in the low-dose combination to 51.6% in the pioglitazone monotherapy group. The incidence of peripheral oedema was highest in patients receiving pioglitazone monotherapy (9.3%) and lowest in those receiving low-dose combination (3.5%). One mild hypoglycaemic event was reported by one patient receiving high-dose combination and one patient receiving vildagliptin monotherapy. Conclusions: First-line treatment with vildagliptin/pioglitazone combination in patients with T2DM provides better glycaemic control than either monotherapy component yet has minimal risk of hypoglycaemia and a tolerability profile comparable with component monotherapy.