Background: Patients with type 2 diabetes who do not achieve glycemic control with oral agent therapy eventually require insulin. Objective: To determine the effect on glycemic control of inhaled insulin alone or added to dual oral therapy (insulin secretagogue and sensitizer) after failure of dual oral therapy. Design: Open-label, randomized, controlled trial. Setting: 48 outpatient centers in the United States and Canada. Patients: 309 patients with type 2 diabetes, no clinically significant respiratory disease, and hemoglobin A 1c level of 8% to 11% who were receiving dual oral therapy. Measurements: Primary end point was change in hemoglobin A 1c level from baseline to 12 weeks. Secondary outcomes included hemoglobin A 1c level less than 8% and less than 7%, hypoglycemia, weight, lipid levels, pulmonary function, insulin antibody binding, and adverse events. Intervention: Inhaled insulin (Exubera; Pfizer Inc. [New York, New York], sanofi-aventis Group [Paris, France], and Nektar Therapeutics [San Carlos, California]), titrated to blood glucose, administered alone (n = 104) or added to dual oral agents (n = 103) versus oral therapy alone (n = 99). Results: Reductions in hemoglobin A 1c level were greater with inhaled insulin. Adjusted treatment group differences for inhaled insulin plus oral agents and inhaled insulin alone compared with continued oral agent therapy were -1.67 percentage points (95% Cl, -1.90 to -1.44 percentage points; P< 0.001) and -1.18 percentage points (Cl, -1.41 to -0.95 percentage point; P< 0.001), respectively. Hemoglobin A 1c level less than 7% was achieved by 32% (inhaled insulin plus oral agents) and by 1% (oral agent therapy) of patients (adjusted odds ratio, 44.7 [Cl, 6.0 to 335.2]). Hypoglycemia, mild weight gain, mild cough, and insulin antibodies were more frequent with inhaled insulin than with oral agent therapy alone. Pulmonary function was similar in all groups. Limitations: This study evaluated only patients with hemoglobin A 1c levels of 8% to 11%, did not compare inhaled insulin with other insulins or oral therapy except a dual regimen of secretagogue and sensitizer, and lasted only 12 weeks. Conclusions: Inhaled insulin improved overall glycemic control and hemoglobin A 1c level when added to or substituted for dual oral agent therapy with an insulin secretagogue and sensitizer. Consistent with other insulin therapies, hypoglycemia and mild weight gain occurred. Pulmonary function showed no between-group differences.