OBJECTIVE: This double-blind, placebo-controlled, randomized, multicenter, parallel-group study compared the efficacy, safety, and tolerability of Technosphere insulin with Technosphere powder as placebo in insulin-naive type 2 diabetic patients whose diabetes was suboptimally controlled with oral antidiabetic agents. RESEARCH DESIGN AND METHODS: Patients (n = 126) were randomly assigned to 12 weeks of therapy with Technosphere insulin or Technosphere powder after lifestyle education on nutrition, exercise, and instructions on inhaler use. The primary efficacy outcome was change in A1C from baseline to study end, and the secondary efficacy outcome was area under the curve for postprandial glucose levels during a meal test at treatment weeks 4, 8, and 12. RESULTS: A1C reduction from a mean baseline of 7.9% was greater with Technosphere insulin than with Technosphere powder (-0.72 vs. -0.30%; P = 0.003). Postprandial glucose excursions were reduced by 56% with Technosphere insulin compared with baseline, and maximal postprandial glucose levels were reduced by 43% compared with Technosphere powder. Incidences of hypoglycemia, hyperglycemia, cough, and other adverse events were low in both groups. Body weight was unchanged in both groups. CONCLUSIONS: Technosphere insulin was well tolerated and demonstrated significant improvement in glycemic control with clinically meaningful reductions in A1C levels and postprandial glucose concentrations after 12 weeks of treatment.