OBJECTIVE To evaluate the cardiovascular (CV) safety of fasiglifam, a first-in-man G-protein–coupled receptor 40 (GPR40) agonist, in patients with type 2 diabetes. RESEARCH DESIGN AND METHODS A phase 3 multicenter randomized double-blind placebo-controlled two-arm trial was intended to randomize 5,000 participants with type 2 diabetes at high CV risk to fasiglifam or placebo. The primary objective of the trial was to rule out an upper noninferiority bound >1.3 for a one-sided 97.5% confidence limit of the hazard ratio (HR) for CV composite events during treatment with fasiglifam compared with placebo. The primary outcome was the time to first occurrence of any component of the major adverse CV event composite of CV death, nonfatal myocardial infarction, nonfatal stroke, and hospitalization for unstable angina. RESULTS The study enrolled 3,207 participants but was terminated because of liver safety concerns. Increased rates of liver enzyme elevation (AST/ALT ≥3–5 × upper limit of normal [ULN]) with fasiglifam were observed. The incidence of ALT or AST ≥3 × ULN with fasiglifam compared with placebo was 2.1% vs. 0.5%, P < 0.001, and the incidence for ≥10 × ULN was 0.31% vs. 0.06%, P < 0.001. A primary CV composite outcome occurred in 40 participants, 2.5% each in the fasiglifam and placebo arms at 12 months (HR 1.05; 95% CI 0.67, 1.63). CONCLUSIONS Development of fasiglifam was terminated due to concerns of drug-induced liver injury. Performance of a U.S. Food and Drug Administration–mandated CV outcomes trial supported the termination of the fasiglifam clinical program.