The role of low grade inflammation in the development of insulin resistance and type 2 diabetes was investigated in rats fed with high fat diet (FD) The possible effects of rosiglitazone and/or aspirin were studied in intact rats fed with HFD and on their isolated pancreas. Feeding rats with high fat diet for 8, 14 and 16 weeks increased level of inflammatory markers e.g. fasting serum C-reactive protein (CRP) level and percentage of neutrophils. This was associated with impaired glucose tolerance. Rosiglitazone and aspirin caused a significant improvement in oral glucose tolerance (OGT) and lipid profile during prophylaxis and treatment. Insulin resistance and inflammation were reduced in prophylaxis only. Rosiglitazone and aspirin increased insulin release from isolated perfused pancreas of normal and HFD fed rats. Combination of the two drugs abolishes their individual effects on OGT, insulin resistance and insulin release. Inflammation is a pathogenic factor in induction of insulin resistance. Aspirin or rosiglitazone is effective anti- inflammatory, insulin sensitizer and insulinotropic drug. Combination of the two drugs abolishes their beneficial effects.