Over 50% of obese African-Americans (AA) presenting with newly diagnosed, severe hyperglycemia and/or unprovoked diabetic ketoacidosis (DKA) display clinical, metabolic, and immunogenetic features of type 2 diabetes. Prior studies by our group and other investigators indicate that a) at presentation, obese AA with history of severe hyperglycemia and/or DKA have markedly decreased pancreatic insulin secretion and impaired insulin action, b) absent or low prevalence of positive beta-cell autoantibodies , and.c) aggressive diabetic management results in significant improvement in beta-cell function and insulin sensitivity sufficient to allow discontinuation of insulin therapy in >90% of patients within 3 months of follow-up. These patients have been referred to as having ketosis-prone type 2 diabetes (KPDM). Most patients with KPDM, however, experience a hyperglycemic relapse within a year of insulin discontinuation. Consequently, patients with KPDM are an ideal model to follow throughout their clinical course in order to correlate their response to treatment with the mechanism(s) and markers of short- and long-term remission and, hopefully, future prevention. Better characterization of the natural history of KPDM would facilitate the direction of long-term therapy, consideration of new treatment modalities, and likely decrease the recurrence of DKA which is associated with increased mortality and morbidity. The specific aims of this proposal are to 1) correlate specific molecular markers in skeletal muscle with patient outcome, beta-cell function, and insulin sensitivity and 2) determine whether pioglitazone therapy will delay an insulin-deficient relapse by improving or preserving beta-cell function and insulin action. The study design is characterized as a prospective, case- cohort study that later incorporates a randomized control trial to evaluate the longitudinal effects of pioglitazone versus sitagliptin versus placebo on maintaining near-normoglycemic remission after the discontinuation of insulin therapy. In addition to testing acute insulin response (glucagon-stimulation test) and immunogenetic factors (pancreatic antibodies and HLA class II typing), subjects will be assessed for differences in insulin sensitivity and secretion at presentation of KPDM and at follow-up of 12 weeks or less (short and long-term outcomes). Assessment of beta-cell function will be performed at designated intervals for individuals that attain near-normoglycemic remission and enter the intervention arm of the study. RELEVANCE (See instructions): Investigating subjects with KPDM will increase knowledge about p-cell function, insulin resistance, guide long-term therapy, fuel avenues for novel therapies, and decrease the recurrence of DKA and admissions.