This 6 arm study will assess the efficacy, safety, tolerability and pharmacokinetics of aleglitazar therapy in patients with Type 2 diabetes. Patients will be randomised to one of 6 treatment arms, to receive one of 4 doses of aleglitazar, Actos as an open-label active comparator, or placebo. Aleglitazar will be administered starting from a dose of 0.05mg po daily, and Actos will be administered at a dose of 45mg once daily. The anticipated time on study treatment is 3-12 months, and the target sample size is 100-500 individuals.