Aims/hypothesis The objective of this prevention programme was to study whether combining pioglitazone with lifestyle modification would enhance the efficacy of lifestyle modification in preventing type 2 diabetes in Asian Indians with impaired glucose tolerance. Methods In a community-based, placebo-controlled 3 year prospective study, 407 participants with impaired glucose tolerance (mean age 45.3±6.2 years, mean BMI 25.9± 3.3 kg/m 2 ) were sequentially grouped to receive either: lifestyle modification plus pioglitazone, 30 mg (n=204) or lifestyle modification plus placebo (n=203). The participants and investigators were blinded to the assignment. The primary outcome was development of diabetes. Results At baseline, both groups had similar demographic, anthropometric and biochemical characteristics. At year 3, the response rate was 90.2%. The cumulative incidence of diabetes was 29.8% with pioglitazone and 31.6% with placebo (unadjusted HR 1.084 [95% CI 0.753-1.560], p=0.665). Normoglycaemia was achieved in 40.9% and 32.3% of participants receiving pioglitazone and placebo, respectively (p=0.109). In pioglitazone group, two deaths and two nonfatal hospitalisations occurred due to cardiac problems; in the placebo group there were two occurrences of cardiac disease. Conclusions/interpretation Despite good adherence to lifestyle modification and drug therapy, no additional effect of pioglitazone was seen above that achieved with placebo. The effectiveness of the intervention in both groups was comparable with that of lifestyle modification alone, as reported from the Indian Diabetes Prevention Programme-1. The results are at variance with studies that showed significant relative risk reduction in conversion to diabetes with pioglitazone in Americans with IGT. An ethnicity-related difference in the action of pioglitazone in non-diabetic participants may be one explanation.