OBJECTIVE: To examine the microvascular risk associated with use of pioglitazone monotherapy versus insulin monotherapy in type 2 diabetes patients by retrospective analysis of the GE Medical Systems (GEMS) clinical database. METHODS: Patients = 18 years of age with a diagnosis of type 2 diabetes mellitus were included if on active treatment after 1999, and if no microvascular events (one or more of neuropathy, nephropathy, or retinopathy) were present at baseline. Only patients who were initiated with pioglitazone or insulin as monotherapy were included. The index date was chosen such that each patient had at least 6 month's treatment with either of the products--- before and at least 6 months after that date. Patients receiving other oral anti-diabetic drugs were excluded. To compensate for lack of double-blind randomization and to reduce selection bias, patients in the pioglitazone group were matched 1:1 with the insulin group based on propensity score calculated using demographic characteristics, co-morbidities, medical therapies, duration of diabetes, and duration of treatment. The odds ratio for the microvascular event in the follow-up period was determined using logistic regression with treatment as a factor and significant (p <0.1) baseline characteristics as covariates in the model. RESULTS: A total of 453 patients in the pioglitazone group were matched to 453 patients in the insulin group. The crude event rate in the pioglitazone group was 3.09% compared with 9.49% in the insulin group (p <0.001) and the odds ratio was 0.304 for pioglitazone (95% CI = 0.164, 0.564; p <0.001). The significant risk reduction projected for the pioglitazone group could not be completely explained by baseline laboratory measurements of lipids, serum creatinine, blood pressures, or duration of diabetes. CONCLUSION: In this retrospective, propensity-matched analysis in patients with type-2 diabetes, the pioglitazone-treated group was associated with a significantly lower incidence of microvascular events than the insulin-treated group.