The main purpose of this study is to assess the effect of RO7204239 on insulin sensitivity versus placebo in participants with T2DM and obesity or overweight.

Inclusion Criteria:

• Participants with T2DM for at least 6 months, treated with diet, exercise and/or metformin alone or in combination with either dipeptidyl peptidase 4 (DPP-4) inhibitor or sodium-glucose co-transporter 2 (SGLT2) at stable dose for the last 3 months prior to study entry and with a HbA1c between ≤ 6.5% and ≤ 10%
• Body mass index (BMI) within the range of 27.0 to 45.0 kilogram per meter square (kg/m2)
• Stable body weight for the 3 months prior to screening
• Participants on lipid-lowering or antihypertensive drugs must be on stable doses for at least 3 months

Exclusion Criteria:

• Type 1 diabetes mellitus (DM), known latent autoimmune diabetes in adults, or people with an episode of ketoacidosis or hyperosmolar state requiring hospitalisation in 6 months prior to screening
• Active proliferative diabetic retinopathy, diabetic maculopathy, or severe non-proliferative diabetic retinopathy requiring acute treatment
• Uncontrolled comorbid conditions commonly associated with diabetes (for example, hypertension, hyperlipidaemia)
• Severe hypoglycaemia within 6 months prior to screening visit
• Current autonomic neuropathy as evidenced by neuropathic urinary retention, resting tachycardia, orthostatic hypotension, or diabetic diarrhea
• Have evidence of a significant, uncontrolled endocrine abnormality (e.g., thyrotoxicosis and adrenal crises)
• Are currently taking a central nervous system stimulant (e.g., Ritalin-SR), with the exception of caffeinated beverage
• Have a known allergy, hypersensitivity, or intolerance to any component of the study treatment (i.e., RO7204239 / placebo) formulation
• Blood donation of more than 500 milliliters (mL) within the past 3 months or blood transfusion or severe blood loss within 3 months prior to screening