The present study is the first stage of a research program whose ultimate goal is to conduct a randomized clinical trial involving type 2 diabetics with BMI from 30.0 to 39.9 kg/m2. This program will determine the relative effectiveness of RYGB combined with intensive medical management (IMM), versus IMM alone, in reducing CVD event rates and mortality in patients with poorly controlled diabetes. IMM will include rigorous lifestyle modification for weight loss and stepped pharmacologic treatment for diabetes and other CVD risk factors. The proposed study is a randomized trial which will provide an assessment of the efficacy of treatment, in reducing CVD risk factors and also assessing the feasibility, cost, and safety of a larger trial.

Inclusion Criteria:

1. Age 30 to 67 years at eligibility visit.
2. Diagnosed with T2DM at least 6 months prior to enrollment, under the active care of a doctor for at least the six months prior to enrollment, and HbA1c ≥ 8.0 %.
3. Body Mass Index (BMI) ≥ 30.0 kg/m2 and ≤ 39.9 kg/m2 at eligibility visit.
4. Willingness to accept random assignment to either treatment group.
5. Expect to live or work within approximately one hour's traveling time from the study clinic for the duration of the two-year trial.
6. Willingness to comply with the follow-up protocol and successful completion of the run-in (described below).
7. Written informed consent.

Exclusion Criteria:

1. Cardiovascular event (myocardial infarction, acute coronary syndrome, coronary artery angioplasty or bypass, stroke) in the past six months.
2. Current evidence of congestive heart failure, angina pectoris, or symptomatic peripheral vascular disease.
3. Cardiac stress test indicating that surgery or IMM would not be safe.
4. Pulmonary embolus or thrombophlebitis in the past six months.
5. Cancer of any kind (except basal cell skin cancer or cancer in situ) unless documented to be disease-free for five years.
6. Significant anemia (hemoglobin 1.0 g or more below normal range) or history of coagulopathy.
7. Serum creatinine ≥ 1.5 mg/dl.
8. HbA1c > 14.0%.