Aims: To assess initial pharmacotherapy of Type 2 diabetes with the sodium-glucose cotransporter-2 inhibitor dapagliflozin. Methods: This double-blind, placebo-controlled trial, randomly allocated people with Type 2 diabetes aged 18-77 years and inadequate glycaemic control on diet and exercise [HbA1c 53-86 mmol/mol (7.0-10.0%)] to receive placebo (n = 75) or dapagliflozin monotherapy 2.5 mg (n = 65), 5 mg (n = 64) or 10 mg (n = 70) once daily in the morning. After 24 weeks, low-dose double-blind metformin 500 mg/day was added to the placebo group regimen (placebo+low-dose metformin group). Changes in HbA1c level, fasting plasma glucose and body weight, as well as adverse events, were assessed over 102 weeks. Results: Of the 274 participants randomized, 167 completed the study (60.9%). At 102 weeks, significant differences vs placebo+low-dose metformin with dapagliflozin 5 and 10 mg were observed for HbA1c (-5.8 mmol/mol [-0.53%], P = 0.018; and -4.8 mmol/mol [-0.44%], P = 0.048), respectively); and for FPG (-0.69 mmol/L, P = 0.044; and -1.12 mmol/l, P = 0.001, respectively). For body weight, the difference between the dapagliflozin 10-mg group and the placebo+low-dose metformin group was significant (-2.60 kg; P = 0.016). Hypoglycaemic events were uncommon, with rates of 5.3% for placebo+low-dose metformin group and 0-4.6% for the dapagliflozin groups. Genital infections and urinary tract infections were more common in the dapagliflozin groups than in the placebo+low-dose metformin group. Conclusions: Dapagliflozin as monotherapy in treatment-naïve people with early Type 2 diabetes improved glycaemic control and reduced weight without increasing hypoglycaemia over 102 weeks. Dapagliflozin may provide an alternative initial pharmacotherapy in such people.