Objectives To assess the effect of self monitoring of blood glucose concentrations on glycaemic control and psychological indices in patients with newly diagnosed type 2 diabetes mellitus. Design Prospective randomised controlled trial of self monitoring versus no monitoring (control). Setting Hospital diabetes clinics. Participants 184 (111 men) people aged <70 with newly diagnosed type 2 diabetes referred to the participating diabetes clinics. Major exclusion criteria were secondary diabetes, insulin treatment, previous self monitoring of blood glucose. Interventions Participants were randomised to self monitoring or no monitoring (control) groups for one year with follow-up at three monthly intervals. Both groups underwent an identical structured core education programme. The self monitoring group received additional education on monitoring. Main outcome measures Between group differences in HbA(1c), psychological indices, use of oral hypoglycaemic drugs, body mass index (BMI), and reported hypoglycaemia rates. Results 96 patients (55 men) were randomised to monitoring and 88 (56 men) to control. There were no baseline differences in mean (SD) age (57.7 (11.0) in monitoring group v 60.9 (11.5) in control group) or HbA(1c) (8.8 (2.1)% v 8.6 (2.3)%, respectively). Those in the monitoring group had a higher baseline BMI (34 (7) v 32 (6.2)). There were no significant differences between groups at any time point (12 months values given) in HbA(1c) (6.9 (0.8)% v 6.9 (1.2)%, P=0.69; 95% confidence interval for difference -0.25% to 0.38%), BMI (33.1 (6.4) v 31.8 (6.0); adjusted for baseline BMI, P=0.32), use of oral hypoglycaemic drugs, or reported incidence of hypoglycaemia. Monitoring was associated with a 6% higher score on the depression subscale of the well-being questionnaire (P=0.01). Conclusions In patients with newly diagnosed type 2 diabetes self monitoring of blood glucose concentration has no effect on glycaemic control but is associated with higher scores on a depression subscale. Trial registration ISRCTN 49814766.