The objective of the current study is to investigate the efficacy, safety and tolerability of several doses of BI 1356 BS (0.5, 2.5 and 5 mg daily) compared to placebo over 12 weeks of treatment in patients with Type 2 diabetes and insufficient glycemic control. In addition, there will be an open-label treatment arm with metformin for sensitivity measurement with this patient population. Population pharmacokinetics of BI 1356 BS will also be assessed in this study.

Inclusion criteria:

1. Male and female patients with a diagnosis of Type 2 diabetes treated only with diet and exercise (drug naïve) or with one or two oral hypoglycemic agents (as single treatment or in combination) other than rosiglitazone or pioglitazone -treatment. Antidiabetic therapy has to be stable for at least 10 weeks prior to screening.

2. Diagnosis of Type 2 diabetes with duration of at least 3 months

3. Glycosylated haemoglobin A1 (HbA1c) of:

   7.5-10.0% at screening for drug naïve patients (no wash-out needed) 7.0-9.0% at screening for patients treated with only one oral antidiabetic agent (wash-out required) 6.5-8.0% at screening for patients treated with two oral antidiabetic agents (wash-out required)

4. HbA1c of 7.5%-10.0% at Visit 3 (beginning of the 2-week placebo run-in period).

5. Age >=21 and <=75 years.

6. BMI (Body Mass Index) >=25.0 and <=40 kg/m2.

7. Signed and dated written informed consent prior to admission to the study in accordance with Good Clinical Practice (GCP) and local legislation

Exclusion criteria:

1. Clinically relevant cardiovascular disease (e.g., myocardial infarction, stroke or transient ischemic attack within six months before enrollment)

2. Impaired hepatic function defined by serum levels of either alanine aminotransferase, aspartate aminotransferase or alkaline phosphatase above 3-fold upper limit of normal

3. Renal insufficiency or impaired renal function defined by serum creatinine above upper limit of normal at screening

4. Diseases of the central nervous system (such as epilepsy) or psychiatric disorders or clinically relevant neurologic disorders (including cerebrovascular but with the exception of polyneuropathy) that would interfere with participation in the trial

5. Chronic or clinically relevant acute infections (e.g., Human immunodeficiency virus, Hepatitis)

6. History of relevant allergy/hypersensitivity that would interfere with trial participation (including allergy to investigational product or its excipients)

7. Treatment with rosiglitazone or pioglitazone within 6 months prior to screening

8. Treatment with insulin within 3 months prior to screening

9. Alcohol or drug abuse within the last 3 months that would interfere with trial participation)

10. Participation in another trial with an investigational drug within two months prior to administration or during the trial

11. Fasting plasma glucose >240 mg/dl (= 13.3 mmol/L) at Visit 2, 3 or 4 any visit and confirmed by a second measurement (not on the same day)

12. Pre-menopausal women (last menstruation <=1 year prior to signing informed consent) who:

    1. are not surgically sterile,
    2. or are nursing or pregnant;
    3. or are of child-bearing potential and are not practicing an acceptable method of birth control, or do not plan to continue using this method throughout the study and do not agree to submit to periodic pregnancy testing during participation in the trial. Acceptable methods of birth control include transdermal patch, intra-uterine devices, oral, implantable or injectable contraceptives and vasectomised partner. No exception will be made.

13. Intolerance of metformin