1. Does amlexanox treatment improve measures of type 2 diabetes, insulin resistance and obesity? To address this question, we intend to treat patients with clinical Type 2 diabetes and Grade 1/2 obesity (BMI 27 to 45 kg/m2) for a period of 3 months in a double-blinded placebo controlled proof-of concept study. We will enroll 40 patients without evidence of severe end-organ damage from chronic complications of Type 2 diabetes who also are on metformin and/or DPPIV inhibitors or no medications, who also have clear-cut evidence of hyperglycemia (HbA1c>6.5% and <10.0%). These patients will be treated with either placebo or Amlexanox oral tablets at a starting dose of 25 mg PO tid for 2 weeks and then titrated up to a dose of 50 mg PO tid (doses used to treat asthma in humans and leading to serum concentrations comparable to metabolically effective doses in rodent studies) for the remainder of the therapy period. HbA1c is targeted as primary end-point in this study. Fasting lipid profiles, plasma insulin, HOMA-IR, clinical markers of inflammation and adipocytokine profiles will be measured as other parameters of interest at baseline, 6 weeks and 12 weeks. Insulin secretion as well as insulin sensitivity will be probed using a mixed meal test. Weight is also an important but secondary end-point in this study. We will determine resting energy expenditure with indirect calorimetry and total body composition using DEXA at baseline and 12 weeks. Safety monitoring with CBC, comprehensive metabolic biochemistry, CPK and urine analyses will be undertaken at 1, 2, 4, 6, and 12 weeks, and urinary albumin at baseline and 12 weeks. Measures of safety and efficacy will be repeated 4 weeks after the drug has been discontinued as well.