Excessive glucose production by the liver coupled with decreased glucose uptake and metabolism by muscle, fat, and liver results in chronically elevated blood glucose levels in patients with type 2 diabetes. Efforts to treat diabetes by reducing glucose production have largely focused on the gluconeogenesis pathway and rate-limiting enzymes within this pathway such as fructose-1,6-bisphosphatase (FBPase). The first potent FBPase inhibitors were identified using a structure-guided drug design strategy (Erion, M. D.; et al. J. Am. Chem. Soc. 2007, 129, 15480-15490) but proved difficult to deliver orally. Herein, we report the synthesis and characterization of a series of orally bioavailable FBPase inhibitors identified following the combined discoveries of a low molecular weight inhibitor series with increased potency and a phosphonate prodrug class suitable for their oral delivery. The lead inhibitor, 10A, was designed with the aid of X-ray crystallography and molecular modeling to bind to the allosteric AMP binding site of FBPase. High potency (IC50 = 16 nM) and FBPase specificity were achieved by linking a 2-aminothiazole with a phosphonic acid. Free-energy perturbation calculations provided insight into the factors that contributed to the high binding affinity. 10A and standard phosphonate prodrugs of 10A exhibited poor oral bioavailability (0.2-11%). Improved oral bioavailability (22-47%) was achieved using phosphonate diamides that convert to the corresponding phosphonic acid by sequential action of an esterase and a phosphoramidase. Oral administration of the lead prodrug, MB06322 (30, CS-917), to Zucker Diabetic Fatty rats led to close-dependent inhibition of gluconeogenesis and endogenous glucose production and consequently to significant blood glucose reduction.