In recent years there has been rapid growth in diabetes in Japan which now is one of the nations most affected by the worldwide diabetes epidemic. Diabetes has been identified as a healthcare priority by the Ministry of Health, Labour and Welfare (MHLW). Type 1 diabetes is rare in Japan, and type 2 diabetes predominates in both adults and children. The growth in diabetes is due to increases in the number of people with type 2 diabetes associated with increased longevity and lifestyle changes. Approximately 13.5% of the Japanese population now has either type 2 diabetes or impaired glucose tolerance. This high prevalence of type 2 diabetes is associated with a significant economic burden, with diabetes accounting for up to 6% of the total healthcare budget. The costs of diabetes are increased in patients with co-morbidities such as hypertension and hyperlipidaemia and in patients who develop complications, of which retinopathy has the highest cost. Costs increase with increasing number of complications. Current guidelines from the Japan Diabetes Society (JDS) recommend a target HbA(1c) of 6.5% for glycaemic control. This is achieved in approximately one third of patients with type 2 diabetes, and Japanese patients typically have lower HbA(1c) than patients in Western countries (e.g. US, UK). Japanese patients with type 2 diabetes have better adherence with diet and exercise recommendations than their peers in Western countries. Sulfonylureas have been the most widely prescribed first-line treatment for type 2 diabetes, although there is increasing use of combination therapy and of insulin.