OBJECTIVE To evaluate the effects of canagliflozin, a sodium-glucose cotransporter 2 inhibitor, in type 2 diabetes mellitus inadequately controlled with metformin monotherapy. RESEARCH DESIGN AND METHODS This was a double-blind, placebo-controlled, parallel-group, multicenter, dose-ranging study in 451 subjects randomized to canagliflozin 50, 100, 200, or 300 mg once daily (QD) or 300 mg twice daily (BID), sitagliptin 100 mg QD, or placebo. Primary end point was change in A1C from baseline through week 12. Secondary end points included change in fasting plasma glucose (FPG), body weight, and overnight urinary glucose-to-creatinine ratio. Safety and tolerability were also assessed. RESULTS Canagliflozin was associated with significant reductions in A1C from baseline (7.6–8.0%) to week 12: −0.79, −0.76, −0.70, −0.92, and −0.95% for canagliflozin 50, 100, 200, 300 mg QD and 300 mg BID, respectively, versus −0.22% for placebo (all P < 0.001) and −0.74% for sitagliptin. FPG was reduced by −16 to −27 mg/dL, and body weight was reduced by −2.3 to −3.4%, with significant increases in urinary glucose-to-creatinine ratio. Adverse events were transient, mild to moderate, and balanced across arms except for a non–dose-dependent increase in symptomatic genital infections with canagliflozin (3–8%) versus placebo and sitagliptin (2%). Urinary tract infections were reported without dose dependency in 3–9% of canagliflozin, 6% of placebo, and 2% of sitagliptin arms. Overall incidence of hypoglycemia was low. CONCLUSIONS Canagliflozin added onto metformin significantly improved glycemic control in type 2 diabetes and was associated with low incidence of hypoglycemia and significant weight loss. The safety/tolerability profile of canagliflozin was favorable except for increased frequency of genital infections in females.