Insulin resistant conditions such as impaired glucose tolerance, type 2 diabetes mellitus, and hyperinsulinemia have been associated with an increased risk for memory decline and for Alzheimer's disease. The main study will determine whether treatment with pioglitazone or nateglinide will improve verbal memory and selective attention for older adults with impaired glucose tolerance or mild type 2 diabetes. The main study will also characterize changes in blood concentrations of insulin, inflammatory markers, and the beta-amyloid peptides that are related to Alzheimer's disease. In one sub-study, participants will undergo brain positron emission tomography (PET) imaging before and after 16 weeks of treatment with pioglitazone, nateglinide, or placebo. The purpose of this sub-study is to determine the effects of treatment on brain glucose utilization. In a second sub-study, participants will undergo a lumbar puncture procedure before and after treatment. The purpose of this sub-study is to determine the effects of treatment on spinal fluid concentrations of insulin, inflammatory markers, and beta-amyloid peptides. Together these main and sub-studies should characterize the effects of insulin resistance on cognition and suggest a mechanism by which insulin resistant conditions increase risk for memory decline and for Alzheimer's disease.