INTRODUCTION: Deciding on an optimal medication choice for type 2 diabetes is often challenging, due to the increasing number of treatment options. Canagliflozin is a novel glucose-lowering agent belonging to sodium-glucose co-transporter 2 (SGLT2) inhibitors.AIM: The aim of this study was to examine and summarize the evidence based on the efficacy, safety, and cost-effectiveness of canagliflozin for type 2 diabetes.EVIDENCE REVIEW: Compared to placebo, canagliflozin 100 and 300 mg lower glycated hemoglobin (HbA1c) by ~0.6%-0.8%, respectively. Canagliflozin appears to be slightly more effective than dipeptidyl peptidase-4 (DPP-4) inhibitors in reducing HbA1c. It also has a favorable effect on body weight and blood pressure, both versus placebo and most active comparators. However, treatment with canagliflozin is associated with increased incidence of genital tract infections and osmotic diuresis-related adverse events. Based on short-term data, canagliflozin is not associated with increased risk for all-cause mortality and cardiovascular outcomes. Economic evaluation studies from various countries indicate that canagliflozin is a cost-effective option in dual- or triple-agent regimens.PLACE IN THERAPY: As monotherapy, canagliflozin could be used in patients for whom metformin is contraindicated or not tolerated. For patients on background treatment with metformin, canagliflozin appears to be superior to sulfonylureas with respect to body weight, blood pressure and risk for hypoglycemia, and to DPP-4 inhibitors in terms of lowering HbA1c, body weight, and blood pressure. Canagliflozin also seems to be cost-effective compared with sulfonylureas and DPP-4 inhibitors as add-on to metformin monotherapy, and compared with DPP-4 inhibitors as add-on to metformin and sulfonylurea.CONCLUSION: Current evidence on intermediate efficacy outcomes, short-term safety and cost-effectiveness support the use of canagliflozin in patients on background treatment with metformin. Robust long-term data regarding the effect of canagliflozin on cardiovascular endpoints will be available upon completion of the Canagliflozin Cardiovascular Assessment Study (CANVAS) trial.