Context: Activation of peroxisome proliferator-activated receptors (PPARs)-γ by thiazolidinediones (pioglitazone, rosiglitazone) and dual-acting PPARα/γ agonists (pargluva, ragaglitazar) is a widely used pharmacological principle to treat insulin resistance and type 2 diabetes. Clinically, however, fluid retention and edema are worrying side effects with these drugs. Objective: The objective of the present study was to investigate any variation in the PPARG and PPARA genes associated with the risk of fluid retention and development of peripheral edema in patients with type 2 diabetes treated with the dual-acting PPARα/γ agonist ragaglitazar. Design: Single-nucleotide polymorphism and haplotype analyses of the PPARA and PPARG genes were performed on DNA obtained from 345 type 2 diabetic patients randomized to 26-wk monotherapy with the dual-acting PPARα/γ agonist ragaglitazar. Results: At 26 wk, edema was recorded in 48 of the patients (14%) treated with ragaglitazar, and Cox regression analyses identified the common Pro12Ala variant of the PPARG gene as biologically the most important risk factor (hazard ratio 4.42, P = 0.0081) for edema. Other risk factors included female gender (hazard ratio 3.34, P = 0.0005) and weight change during treatment (hazard ratio 1.20, P = 0.0017). Conclusions: A population-attributable risk of approximately 50% for the Pro12Pro genotype indicates that testing for the Pro12Ala of the PPARG gene in addition to the already identified clinical risk factors may become a useful tool to further reduce the risk of PPARγ agonist-induced fluid retention and edema in patients with type 2 diabetes.