Aim: This study was performed to ascertain whether losartan combined with pioglitazone is superior to losartan alone in delaying the progression of chronic renal failure in patients with type 2 diabetic nephropathy. Methods: Sixty patients with type 2 diabetic nephropathy (stage 3 or 4 chronic kidney disease) were enrolled in a randomized, controlled trial. Thirty patients received losartan (100 mg/day) and pioglitazone (30 mg/day), and 30 patients received losartan only (100 mg/day). The patients were assessed at baseline and at 3-month intervals for 24-hour urinary protein excretion, serum creatinine, creatinine clearance, and fasting blood glucose values. The glomerular filtration rate was measured by means of a <sup>99m</sup>Tc-diethylenetriamine penta-acetic renogram at baseline and after 12 months. Results: As compared with therapy with losartan alone, the losartan-pioglitazone combination therapy resulted in significantly lower serum creatinine and fasting glucose values at 12 months and in significantly lower degrees of proteinuria at 6 and 12 months. The declines in creatinine clearance and glomerular filtration rate below baseline measurements at stages 3 and 4 of chronic kidney disease were significantly slower for the losartan-pioglitazone group as compared with the losartan-only group. Conclusions: Renoprotection conferred by losartan combined with pioglitazone is superior to that conferred by losartan alone in subjects with type 2 diabetic nephropathy. The combination is generally well tolerated.