Inclusion Criteria:

• At least 2 years since diagnosis of type 2 diabetes mellitus
• Received subcutaneous (sc) insulin for at least 3 months
• Body Mass Index <44 kg/m2
• HbA1c>7.0% and <11.5%
• Serum creatinine <2.0 mg/dL for males and <1.8 mg/dL for females
• Baseline FVC and FEV1>70% and < 125% of predicted normal

Exclusion Criteria:

• Significant hepatic disease (AST/ALT3 x ULN)
• Diagnosis of Type 1 diabetes
• Severe complications of diabetes
• History of moderate to severe ketoacidosis within the past 3 months
• Upper respiratory infection in the last 15 days or a lower respiratory infection in the past 30 days
• Diagnosis of HIV
• Positive serology for hepatitis B or C
• COPD, emphysema, or asthma
• Current smokers or smoking history within the past 6 months
• Major psychiatric disorder precluding satisfactory completion of protocol
• Clinically significant heart disease disease, stroke or heart attack within the past 6 months
• Treatment with an investigational drug within 30 days
• Previous treatment with Technosphere/Insulin
• History of malignancy in the past 5 years except basal cell carcinoma
• Anemia (hemoglobin <10.5 g/dL for females and <11.5 g/dL (for males)
• Women who were pregnant of lactating
• History of hypersensitivity to drugs resembling FDKP carrier products
• Treatment with another inhaled insulin product during the duration of the study