A combination of insulin resistance and pancreatic beta-cell dysfunction underlies most cases of type 2 diabetes. While the interplay of these two impairments is believed to be important in the development and progression of type 2 diabetes, the mechanisms involved are unclear. A number of factors have been suggested as possibly linking insulin resistance and beta-cell dysfunction in the pathogenesis of type 2 diabetes mellitus. Pro-inflammatory cytokines such as tumour necrosis factor-alpha (TNF-alpha) have deleterious effects on both glucose homeostasis and beta-cell function, and can disrupt insulin signalling pathways in both pancreatic beta cells and liver and adipose tissue. The anti-inflammatory activity of the thiazolidinedione anti-diabetic agents is potentially beneficial, given the possible role of pro-inflammatory cytokines in linking insulin resistance with beta-cell dysfunction.