This double-blind, double-dummy 3 arm study will evaluate the efficacy, safety and tolerability of taspoglutide versus pioglitazone in patients with type 2 diabetes mellitus inadequately controlled with sulfonylurea monotherapy or sulfonylurea plus metformin combination therapy. After an initial screening period, patients will be randomized to one of 3 groups, to receive a)taspoglutide 10mg sc weekly, b)taspoglutide 20mg sc weekly after 4 weeks of taspoglutide 10mg sc weekly or c)pioglitazone 45mg/day po after 4 weeks of pioglitazone 30mg/day po.The anticipated time on study treatment is 24 months, and the target sample size is 500+ individuals.