This randomized, double-blind, placebo-controlled, parallel-group study will evaluate the effect of aleglitazar on renal function, the renin-angiotensin system and the pharmacokinetics of lisinopril in patients with type 2 diabetes mellitus treated with lisinopril. Patients on a stable dose of lisinopril (20 mg daily orally) for 2 weeks will be randomized to receive either aleglitazar (150 mcg orally daily) or placebo in addition to lisinopril for 4 weeks.

Inclusion Criteria:

• Adult male and female patients, 18 to 65 years of age, inclusive
• Diabetes mellitus Type 2, diagnosed at least 3 months before screening
• Treated with stable dose of metformin for at least 4 weeks prior to screening
• Treated with stable dose of Angiotensin-converting enzyme inhibitor (ACEI) for at least 4 weeks prior to screening
• Body mass index (BMI) 18 to 38 kg/m2, inclusive

Exclusion Criteria:

• Positive for HIV-1, HIV-2, hepatitis B or hepatitis C infection
• Pregnant or lactating females
• Type 1 diabetes or secondary from of diabetes
• History or evidence of proliferative diabetic retinopathy or clinically significant neuropathy
• Clinically significant hepatic disease
• Clinically significant renal impairment
• History or evidence of clinically significant cardio-vascular disease or disorder
• Acute infection or current malignancy requiring treatment except for excised basal cell carcinoma