The objective of the present study was to formulate pioglitazone matrix tablets for controlled release. Controlled release matrix tablets of pioglitazone were developed for better control of blood glucose levels by prolonging its duration of action and to reduce GI disturbances with improved patient compliance. The tablets were prepared by wet granulation technique employing 50% w/w Hydroxypropyl methylcellulose K 15M as release controlling agent. Lactose and dicalcium phosphate were used as diluents. Polyvinyl pyrrolidone and polyethylene glycol 6000 were used as solubilizers. A 23 factorial design was applied for study and evaluation of the individual and combined effects of type of diluent (Factor A), polyvinyl pyrrolidone (Factor B) and polyethylene glycol 6000 (Factor C) on drug release from pioglitazone matrix tablets. Different dissolution models were applied to drug release data in order to evaluate release mechanisms and kinetics. All Pioglitazone matrix tablets followed first order kinetics, Higuchi drug release kinetics with diffusion as the dominant mechanism of drug release. As per Korsmeyer-Peppas equation, the release exponent 'n' ranged 0.663-0.892 indicating that drug release from all the batches was by non-Fickian diffusion mechanism. The type of diluent and solubilizers had highly significant effect on the drug release from the tablets (P < 0.01). The results of drug release study indicated that lactose as diluent gave relatively higher release rate than dicalcium phosphate. Polyethylene glycol 6000 gave relatively higher release than polyvinyl pyrrolidone. A combination of factors A, B and C gave slow, controlled and complete release of pioglitazone over a period of 24 hours.