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Observational studies suggest that surgically induced loss of weight may be effective therapy for type 2 diabetes.To determine if surgically induced weight loss results in better glycemic control and less need for diabetes medications than conventional approaches to weight loss and diabetes control.Unblinded randomized controlled trial conducted from December 2002 through December 2006 at the University Obesity Research Center in Australia, with general community recruitment to established treatment programs. Participants were 60 obese patients (BMI >30 and <40) with recently diagnosed (<2 years) type 2 diabetes.Conventional diabetes therapy with a focus on weight loss by lifestyle change vs laparoscopic adjustable gastric banding with conventional diabetes care.Remission of type 2 diabetes (fasting glucose level <126 mg/dL [7.0 mmol/L] and glycated hemoglobin [HbA1c] value <6.2% while taking no glycemic therapy). Secondary measures included weight and components of the metabolic syndrome. Analysis was by intention-to-treat.Of the 60 patients enrolled, 55 (92%) completed the 2-year follow-up. Remission of type 2 diabetes was achieved by 22 (73%) in the surgical group and 4 (13%) in the conventional-therapy group. Relative risk of remission for the surgical group was 5.5 (95% confidence interval, 2.2-14.0). Surgical and conventional-therapy groups lost a mean (SD) of 20.7% (8.6%) and 1.7% (5.2%) of weight, respectively, at 2 years (P < .001). Remission of type 2 diabetes was related to weight loss (R2 = 0.46, P < .001) and lower baseline HbA1c levels (combined R2 = 0.52, P < .001). There were no serious complications in either group.Participants randomized to surgical therapy were more likely to achieve remission of type 2 diabetes through greater weight loss. These results need to be confirmed in a larger, more diverse population and have long-term efficacy assessed.actr.org Identifier: ACTRN012605000159651.