Nateglinide (Starlix®) is licensed for the treatment of Type 2 diabetes in patients inadequately controlled with metformin. The study objective was to monitor the safety and use of nateglinide prescribed by primary care physicians (GPs) in England, using the observational cohort technique, Prescription–Event Monitoring. Exposure data were derived from dispensed nateglinide prescriptions issued October 2001–June 2004; demographic and outcome data, from questionnaires sent to patients’ GPs at least 6 months after patients’ first prescription. Incidence densities (IDs; number of first reports of an event/1,000 patient-months exposure) were calculated for month 1 (ID1), months 2–6 (ID2–6); rate differences [ID1−ID2–6 (+99% CI)] were examined. Cohort comprised 4,557 patients, median age 60 (IQR 51, 68 years); 2,439 (53.5%) male; 3,463 (76.0%) received nateglinide in combination with metformin. GPs reported 1,625 reasons for stopping in 1,474 (32.3%) patients and 80 events as adverse drug reactions in 66 (1.5%) patients. Events associated with starting treatment included nausea/vomiting [ID1−ID2–6 9.6 (99% CI 5.3, 13.9)], malaise/lassitude [ID1−ID2–6 6.03 (99% CI 2.2, 9.9)]. No serious hypersensitivity reactions were reported. Two pregnancies (< 0.1%) and 73 deaths (1.6%) were reported. Nateglinide appeared to be generally well tolerated when used in combination with metformin for the treatment of Type 2 diabetes.