1. PURPOSE/SPECIFIC AIMS To determine the role of pioglitazone in the treatment of nonalcoholic steatohepatitis (NASH) in patients with glucose intolerance or type 2 diabetes mellitus (T2DM). NASH is a disease characterized by elevated plasma aminotransferases and histopathological changes in liver characterized by hepatocellular steatosis, chronic inflammation and fibrosis (1-3). Pioglitazone, a new thiazolidinedione (TZD), has proven to be safe and effective for the treatment of type 2 diabetes mellitus (T2DM) (4). NASH affects ~10-20% of obese and type 2 diabetic subjects (1-3, 5, 6). While the pathogenesis of NASH is poorly understood, there is consensus that insulin resistance and its associated abnormalities in lipid metabolism play a key role in the development of liver fat accumulation, and TNF-alpha is a major mediator in the progression of liver damage (7-9). Currently, there is no satisfactory therapy for NASH.