The association between hyperglycemia and inflammation is well-established now. Antidiabetes drugs may alleviate inflammation by reducing hyperglycemia, but their role in inflammation is ambiguous. Recent data suggest that immunomodulatory treatments may have beneficial effects on glycemia, β-cell function and insulin resistance. Thiazolidinediones (TZDs) have the best proven anti-inflammatory mechanism of action. Hydroxychloroquine is studied extensively for its anti-inflammatory benefits in diabetes. Other anti-inflammatory agents have only limited data to support. Anti TNF-∝, anti-IL-1β, salsalate, diacerein, etc., are also being researched for their beneficial effects. Further studies are required to clarify the role of anti-inflammatory therapy in the management of type 2 diabetes. Better understanding of inflammatory basis for diabetes may provide novel modalities for diabetes prevention and treatment.