The incretin hormones are intestinal peptides that enhance insulin secretion following ingestion of nutrients. Liraglutide is a glucagon-like peptide-1 receptor analogue, which is obtained by derivatising glucagon-like peptide-1 with a fatty acid, providing a compound with pharmacokinetic properties that are suitable for once-daily dosing. Liraglutide has demonstrated lasting improvement of HbA(1c )levels, weight reduction and improved beta-cell function in patients with Type 2 diabetes mellitus. Liraglutide is well tolerated; the adverse events that are most frequently reported being transient nausea and diarrhoea. This article reviews the mechanisms of action and efficacy of liraglutide for the treatment of Type 2 diabetes mellitus. This agent is presently in Phase III clinical development.