Many people with type 2 diabetes cannot maintain target blood glucose levels when taking a single oral drug. The purpose of this study is to assess the safety and effectiveness of the combination of vildagliptin, an unapproved drug, and pioglitazone in lowering overall blood glucose levels in people with type 2 diabetes who have not previously been treated with drug therapy to lower their blood sugar.

Inclusion Criteria:

• Not previously treated with oral antidiabetic agents as defined by the protocol
• Blood glucose criteria must be met
• Body mass index (BMI) in the range 22-45

Exclusion Criteria:

• Pregnancy or lactation
• Type 1 diabetes
• Evidence of serious diabetic complications
• Evidence of serious cardiovascular complications
• Laboratory value abnormalities as defined by the protocol
• Known sensitivity to pioglitazone
• Other protocol-defined exclusion criteria may apply