OBJECTIVE—We sought to examine the mechanisms by which the addition of glargine insulin or rosiglitazone improves glycemic control in type 2 diabetic subjects poorly controlled on maximally effective doses of metformin plus sulfonylurea. RESEARCH DESIGN AND METHODS—Subjects (aged 47 ± 11 years, BMI 31 ± 5 kg/m2, HbA1c [A1C] 9.4 ± 1.3%) received bedtime glargine insulin (titrated based on the fasting plasma glucose [FPG], n = 10) or rosiglitazone (4 mg twice daily, n = 10). At baseline and after 4 months, A1C was measured and an oral glucose tolerance test and a 3-h euglycemic insulin (80 mU/m2 per min) clamp with [3-3H]glucose were performed. RESULTS—A1C and FPG decreased similarly in the glargine insulin (9.1 ± 0.4 to 7.6 ± 0.3% and 212 ± 14 to 139 ± 5 mg/dl, respectively, both P < 0.0001) and rosiglitazone (9.4 ± 0.3 to 7.6 ± 0.4% and 223 ± 14 to 160 ± 19 mg/dl, respectively, both P < 0.005) groups. After 4 months, endogenous glucose production (EGP) declined similarly with glargine insulin (2.27 ± 0.10 to 1.73 ± 0.12 mg · kg−1 · min−1, P < 0.0001) and rosiglitazone (2.21 ± 0.12 to 1.88 ± 0.12 mg · kg−1 · min−1, P = 0.01). The hepatic insulin resistance index declined in the rosiglitazone group (32 ± 3 to 21 ± 1 mg · kg−1 · min−1 × μU/ml, P = 0.03 vs. baseline and P < 0.05 vs. glargine insulin) and did not change in the glargine group (22 ± 5 to 20 ± 3 mg · kg−1 · min−1 × μU/ml, P = NS). At 4 months, glargine insulin (3.6 ± 0.5 to 4.2 ± 0.4 mg · kg−1 · min−1, P < 0.01) and rosiglitazone (2.7 ± 0.3 to 3.8 ± 0.3 mg · kg−1 · min−1, P < 0.0005) increased Rd, but the increment was greater in the rosiglitazone group (P < 0.05). Diastolic blood pressure was reduced only by rosiglitazone (P < 0.01). CONCLUSIONS—Triple therapy with glargine insulin or rosiglitazone similarly reduced A1C, primarily by suppressing basal EGP (hepatic). Glargine insulin reduced basal EGP by increasing plasma insulin levels, while rosiglitazone decreased basal hepatic glucose production by improving hepatic insulin sensitivity.