The incretin hormones, GIP and GLP-1, may be responsible for up to 70% of postprandial insulin secretion. In type 2 diabetes (2DM) the incretin effect is severely reduced. Secretion of GIP is normal, but its effect on insulin is lost. GLP-1 secretion may be impaired, but its actions may restore insulin secretion to near normal levels. Substitution therapy with GLP-1 might therefore be possible. GLP-1 actions include: potentiation of glucose-induced insulin secretion; upregulation of insulin and other β-cell genes; stimulation of β-cell proliferation and neogenesis and inhibition of β-cell apoptosis; inhibition of glucagon secretion; inhibition of gastric emptying; and inhibition of appetite and food intake. It may also have cardio- and neuroprotective actions. These actions make GLP-1 particularly attractive as a therapeutic agent for 2DM but GLP-1 is rapidly destroyed in the body by the enzyme, DPP-IV. Clinical strategies therefore include: 1) the development of metabolically stable activators of the GLP-1 receptor; and 2) inhibition of DPP-IV. Orally active DPP-IV inhibitors are currently undergoing clinical trials and recent clinical studies have provided long term proof of concept. Metabolically stable analogues/activators include the structurally related lizard peptide, exendin-4, or analogues thereof, as well as GLP-1 derived molecules that bind to albumin and thereby assume the pharmacokinetics of albumin. These molecules are effective in animal experimental models of type 2 diabetes, and have been employed successfully in clinical studies of up to 82 weeks duration, and exendin-4 has just been approved for add-on therapy of 2DM.