OBJECTIVE：To provid e reference for safe ，effective and economical medication scheme for type 2 diabetes mellitus（T2DM）. METHODS ：Markov model was established for rosiglitazone sodium and metformin in the treatment of T 2DM. According to the development characteristics of T 2DM，the development of T 2DM was simulated by the dynamic changes of event-free，complications and deaths of T 2DM. The long-term cost and effect of rosiglitazone sodium and metformin in the treatment of T 2DM were obtained by regression analysis and queue simulation analysis. QALYs was used as a health output indicator，and t he superiority and inferiority of different schemes were judged by the ICER value ，and in our study ICER value was WTP（12 000 yuan per year ）of diabetics. The sensitivity of cost ，utility and discount was analyzed to check the stability of the analysis results. RESULTS ：Cost-effectiveness analysis of Markov model showed that the cumulative cost and health effectiveness of rosiglitazone sodium therapy were 25 164.00 yuan and 7.50 QALYs，while 17 773.36 yuan and 7.36 QALYs for metformin ； ICER of rosiglitazone sodium relative to metformin was 50 983.08 yuan/QALYs，which was greater than WTP ，so the metformin treatment was an advantageous scheme. Sensitivity analysis showed that health utility value and discount rate of diabetes mellitus greatly influenced analysis results of the model ，but advantage plan had not changed within the sensiitivity analysis range seted in this study. CONCLUSIONS ：For T 2DM，metformin is more cost-effective than rosiglitazone sodium.