Peroxisome proliferator-activated receptor gamma (PPARgamma) agonists are highly effective in the treatment of type 2 diabetes. In some patients, PPARgamma ligands are associated with fluid retention/oedema, for which the mechanism is not fully understood. A pharmacogenetic study was undertaken to investigate effects of variations in 21 candidate genes related to epithelial sodium channel (ENaC) pathways on oedema. This study used DNA samples collected from type 2 diabetes phase III clinical trials of the PPARgamma agonist farglitazar (administered alone or in combination with insulin or glyburide) and investigated oedema reported as an adverse event as phenotype. Initial case-control analysis of oedema identified candidate gene single nucleotide polymorphisms with significant associations. These included three polymorphisms in ENaCbeta subunit (SCNN1B) that showed significant associations (P<0.05) with the two combination treatments in discrete regions of the gene, but not farglitazar treatment alone. Sequencing of SCNN1B in 207 Caucasian participants receiving farglitazar plus insulin or glyburide combination therapies, identified additional polymorphisms that were also significantly associated with oedema (P<0.0005) and maintained the treatment-regional associations. Further covariate analysis accounting for clinical factors influencing oedema supported these observations. One of the SCNN1B polymorphisms, at position -405 of the 5' flanking region (rs34241435), was predicted to modify transcriptional interactions and in a transfected COS cell luciferase reporter gene assay exhibited higher promoter activity. These exploratory studies provide clinical pharmacogenetic and functional genomic evidence to support a pivotal role for ENaC regulation in PPARgamma-induced oedema and provide insight into mechanisms and possible management of this side effect.