This double-blind, placebo-controlled, dose-finding study is designed to identify the lowest AGI-1067 dose that improves glycemic control as measured by HbA1c and fasting glucose in subjects with Type 2 diabetes mellitus. Glycemic control will be measured during a 6-month treatment period in subjects who are on 1 or no antidiabetic drugs

Inclusion Criteria:

1. Provide informed written consent prior to entry.
2. Be male or female 18-75 years of age at the time of entry and have Type 2 diabetes for a minimum of 6 months prior to Screening 1 visit.
3. Have an HbA1c level measured at the Screening 1 and Screening 2 visits with a minimum level at ≥7.5% for both visits, as determined by the core lab analysis.
4. Be taking either 1 or no antidiabetic agents. If on an antidiabetic medication, it must be of the sulphonylurea, metformin, or glitazone class, and the dosage must have been stable for the last 3 months prior to the Screening 1 visit. Note that no combination medications (i.e., counted as more than 1 agent) will be permitted prior to Randomization and that the use of GLP mimetrics, DPPIV inhibitors, or colesevelam are not permitted (rescue medication will be allowed at 3 months).
5. Subjects who are using hormone replacement therapy must have been on stable doses of their hormone replacement therapy for at least 3 months prior to the Screening 1 visit.
6. Females must not be breast feeding or pregnant. If they are of child-bearing potential, they must be using a reliable method of birth control considered suitable by the Investigator. If on hormonal contraceptives for more than 6 months, subjects will be allowed to participate in the study provided that this therapy remains constant throughout the study and for a period of 2 months after the end of the study.

Exclusion Criteria:

1. Have Type 1 diabetes or history of ketoacidosis determined by medical history
2. Have an HbA1c of more than 10.5% or a fasting glucose of >240 mg/dL (13.3 mmol/L) at either the Screening 1 [Visit 1] or Screening 2 [Visit 2])
3. Have a history of severe diabetic neuropathy including autonomic neuropathy, gastroparesis, or lower limb ulceration or amputation.
4. Have a history of long-term therapy with insulin (>30 days) within the last year or >7 days within the last 3 months.
5. Require parenteral corticosteroids or recurrent continuous oral corticosteroid treatment (>2 weeks) within the last 3 months.
6. Use weight loss drugs (e.g., orlistat, sibutramine, phenylpropanolamine, phentermine, or similar prescription or over-the-counter medications) within 3 months of the Screening 1 visit or intentional weight loss of ≥4 kg in the previous 6 months.
7. Have had a new antidiabetic medication added, or the dose of an existing antidiabetic medication changed, in the last 3 months prior to the Screening 1 visit.
8. Have had a stroke, MI, coronary artery bypass graft (CABG), percutaneous transluminal coronary angioplasty (PTCA), or admission with unstable angina within the last 6 months prior to the Screening 1 visit.
9. Have congestive heart failure New York Heart Association Class III or IV (Appendix B).
10. Have taken any of the following drugs in 6 months prior to the Screening 1 visit: cholestyramine, colestid, cyclosporine, or isotretinoin.
11. Have acute infections requiring parenteral antibiotic treatment within the last 3 months.
12. Have uncontrolled hypertension (defined as systolic blood pressure >180 mmHg).
13. Have platelets <100,000 K/cu mm (x 103/μL) at the Screening 1 visit.
14. Have active liver disease or hepatic dysfunction (total bilirubin, aspartate aminotransferase [AST], alanine aminotransferase [ALT] >1.5 times upper limit of normal [ULN]) as determined by core lab analysis at either the Screening 1 visit or the Screening 2 visits.
15. Subjects with long QT syndrome as evidence by a QTc at the Screening 1 visit of >460 msec in males or >480 msec in females or subjects taking and requiring continued therapy with antiarrhythmic medications such as sotalol, quinidine, dofetilide, amiodarone or other drugs known to significantly prolong the QT interval (this will not include drugs associated with minor effect on the QT interval of less than 15 msec.)
16. Have known major chronic infection or major hematologic, renal, metabolic, gastrointestinal or endocrine dysfunction in the judgment of the Investigator (including diabetes mellitus too severe to allow the subject to safely participate in this study).
17. Have had a life-threatening illness or any history of cancer or malignancy within the past 5 years (except for basal cell carcinoma).
18. Have had surgery requiring inpatient admission within 30 days prior to the Screening 1 visit.
19. Considered unreliable as a study participant based on the Investigator's (or designee's) knowledge of the subject (e.g., history of alcohol or other drug abuse, inability or unwillingness to adhere to the protocol, or psychosis).
20. Have a history of intolerance or previous use of probucol within the last 5 years.
21. Have participated in a previous study with AGI-1067.
22. Have participated in any investigational drug study within 30 days prior to study entry, or expects to participate in any other investigational drug study during the course of ANDES.