Diabetes is a chronic disease that leads to multiple microvascular and macrovascular complications. It is the seventh leading cause of death in the United States with increased prevalence worldwide. There are multiple antihyperglycemic medication classes available on the market with advantages and disadvantages. Canagliflozin, a novel agent that lowers plasma glucose by decreasing glucose reabsorption at the proximal tubules of nephrons, inhibits the sodium-glucose cotransporter 2. Data suggest a decrease in hemoglobin A1C by about 1% in both fasting and postprandial plasma glucose levels, when canagliflozin was studied as monotherapy or with various combinations of metformin, pioglitazone, sulfonylurea, and insulin. Interestingly, canagliflozin use in geriatric patients and in those with renal impairment showed decreased efficacy and an increased risk of adverse reactions. These include, but are not limited to, hypotension, renal impairment, hyperkalemia, hypoglycemia, genital mycotic infections, hypersensitivity reactions, and increases in low-density lipoproteins. Hypoglycemia is a rare occurrence when canagliflozin is used alone but can occur more frequently when used in combination with sulfonylurea or insulin. This article reviews the pharmacology of canagliflozin, examines available clinical trials for efficacy and safety, and describes its role in diabetes management.