OBJECTIVE While metformin is generally accepted as the first-line agent in treatment of type 2 diabetes, there are insufficient evidence and extensive debate about the best second-line agent. We aimed to assess the benefits and harms of four commonly used antihyperglycemia treatment regimens considering clinical effectiveness, quality of life, and cost. RESEARCH DESIGN AND METHODS We developed and validated a new population-based glycemic control Markov model that simulates natural variation in HbA1c progression. The model was calibrated using a U.S. data set of privately insured individuals diagnosed with type 2 diabetes. We compared treatment intensification of metformin monotherapy with sulfonylurea, dipeptidyl peptidase-4 inhibitor, glucagon-like peptide-1 receptor agonist, or insulin. Outcome measures included life-years (LYs), quality-adjusted life-years (QALYs), mean time to insulin dependence, and expected medication cost per QALY from diagnosis to first diabetes complication (ischemic heart disease, myocardial infarction, congestive heart failure, stroke, blindness, renal failure, amputation) or death. RESULTS According to our model, all regimens resulted in similar LYs and QALYs regardless of glycemic control goal, but the regimen with sulfonylurea incurred significantly lower cost per QALY and resulted in the longest time to insulin dependence. An HbA1c goal of 7% (53 mmol/mol) produced higher QALYs compared with a goal of 8% (64 mmol/mol) for all regimens. CONCLUSIONS Use of sulfonylurea as second-line therapy for type 2 diabetes generated glycemic control and QALYs comparable with those associated with other agents but at lower cost. A model that incorporates HbA1c and diabetes complications can serve as a useful clinical decision tool for selection of treatment options.