Type 2 diabetes mellitus is a disease of complex pathogenesis and pleiotropic clinical manifestations. The greatest clinical challenge in this disease is the prevention of the long-term complications, many of which involve cardiovascular outcomes. The peroxisome proliferator-activated receptor (PPAR) alpha and gamma isoforms of the family of nuclear transcription factors are pharmaceutical targets for therapeutic intervention because they can potentially ameliorate not only the hyperglycemia of diabetes, but also the dyslipidemia that is characteristic of this disorder (low high-density lipoprotein cholesterol, high triglycerides, small, dense low-density lipoprotein particles). Novel drugs with dual PPAR alpha and gamma activity have been under clinical development for type 2 diabetes, and they have shown promise in early studies with regard to glucose lowering and improved lipid profile when compared with the PPAR-gamma-specific thiazolidinediones. Unfortunately, the dual PPARs available to date have some of the PPAR-gamma-associated side effect profile, including fluid retention and weight gain, which have limited the further clinical development of higher doses that show improved efficacy. This review will briefly summarize our understanding of the pathogenesis of type 2 diabetes, the role of the PPAR family of receptors, and the potential for clinical use of this novel emerging class of agents that serve as dual activators of both PPAR-alpha and PPAR-gamma.