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Background: Type-2 diabetes is strongly driven by obesity. Observational studies suggest that weight loss through bariatric surgery is more effective than conventional therapy for the management of type-2 diabetes, but no randomized controlled trial has been performed. Methods: We conducted a 2-year randomized controlled trial involving 60 obese (BMI > 30 and < 40 kg/m2) subjects with recently diagnosed (<2years) typo-2 diabetes. Subjects drawn from the general community were randomly allocated to either a program of conventional diabetes therapy with an intensive lifestyle change to induce weight loss or had substantial weight loss induced by the placement of a laparoscopic adjustable gastric band (LAGB; LAP-BAND®, Allergan Health) in addition to conventional care. The intensity of programs was similar. Key outcome measures were diabetes remission (fasting plasma glucose <7mmol/l, plus HbA1c <6.2% while taking no hypoglycaemic drug therapy or insulin), HbA1c levels, indirect measures of insulin resistance, and presence of metabolic syndrome. Results: At 2 years, the LAGB group and conventional groups had lost mean (SD) of 20.7 (8.6) % and 1.7 (5.2) % of weight respectively (P <0.001). Remission of diabetes was achieved by 22 of 29 (76%) the LAGB, and 4 of 26 (15%) of the conventional 2-year completers (p<0.001). Weight loss was the major driver of remission (R2 =0.46, p<0.001), with a 13% weight loss cutoff providing an 85% sensitivity and 86% specificity for remission. HbA1c levels fell 22.5 (11.6) % in the LAGB and 5.4 (15.2) % in the conventionally treated groups. The surgical group also had greater improvements in fasting plasma glucose, insulin, triglycerides and HDL-cholesterol. The metabolic syndrome was present in 29 of 30 in each group initially and in 8 of 29 LAGB and 22 of 26 conventional groups at 2 years. There were no serious complications in either treatment group. Conclusions: There is a direct relationship between weight loss and remission of type 2 diabetes in obese subjects. Substantial weight loss induced by LAGB is associated with a significantly better outcome than conventional therapy. LAGB placement should be considered when planning a treatment program for obese subjects diagnosed with type-2 diabetes. [ABSTRACT FROM AUTHOR]