This 2 arm study will compare the effects of aleglitazar and Actos, added to preexisting oral antihyperglycemic therapy and/or diet and exercise, on renal function in patients with type 2 diabetes, and normal or mildly impaired renal function. Eligible patients will be randomized to receive either aleglitazar 0.6mg p.o. or Actos 45mg p.o. daily. Renal function and efficacy parameters will be assessed at intervals during the treatment period. The anticipated time on study treatment is 3-12 months, and the target sample size is 100-500 individuals.

Inclusion Criteria:

• adult patients, 18-75 years of age;
• type 2 diabetes for >=1 month;
• drug naive, or receiving stable oral antihyperglycemic medication;
• HbA1c 6.5-10.0% at screening.

Exclusion Criteria:

• type 1 diabetes;
• current or previous treatment with insulin;
• history of renal disease other than diabetic nephropathy;
• uncontrolled hypertension;
• clinically significant cardiovascular disease;
• Congestive heart failure (CHF) New York Heart Association (NYHA) 3-4.