Despite dramatically increased research efforts to discover cures for the rising health issue of obesity, bariatric (obesity) surgery remains the most effective treatment. Obese people and especially those classified as morbidly obese often suffer from associated co-morbid conditions such as type-II diabetes. In most cases, bariatric surgery results in rapid and sustained decreases in excess body weight. Recent reports have identified significant improvements in glucose homeostasis after surgery that are coincident and often precedent to any measurable weight loss. These studies suggest an inhibition or enhancement of a "factor" within the intestinal tract that improves glycemia independent of body fat stores. These observations have sparked renewed investigation into the mechanisms underlying successful obesity surgeries such as gastric bypass. It is becoming increasingly clear that restriction and malabsorption are not the only two mechanisms important for inducing long-term weight loss or the improvements in diabetes. Investigating the hypothesis that the distal intestine (ileum) holds additional answers into a third mechanism, I used the model of ileal transposition to help identify endocrine changes in the gut following obesity surgery. This review will explore the model of ileal transposition and speculate on its usefulness as a tool to dissect out additional mechanisms underlying effective obesity surgeries. Also discussed will be the ileal-produced hormone glucagon-like peptide and its role in mediating the improvements in diabetes and weight loss after bariatric surgery.