The incretin hormones are released during meals from gut endocrine cells. They potentiate glucose-induced insulin secretion and may be responsible for up to 70% of postprandial insulin secretion. The incretin hormones include glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP), both of which may also promote proliferation/neogenesis of beta cells and prevent their decay (apoptosis). Both hormones contribute to insulin secretion from the beginning of a meal and their effects are progressively amplified as plasma glucose concentrations rise. The current interest in the incretin hormones is due to the fact that the incretin effect is severely reduced or absent in patients with type 2 diabetes mellitus (T2DM). In addition, there is hyperglucagonaemia, which is not suppressible by glucose. In such patients, the secretion of GIP is near normal, but its effect on insulin secretion, particularly the late phase, is severely impaired. The loss of GIP action is probably a consequence of diabetes, since it is also observed in patients with diabetes secondary to chronic pancreatitis, in whom the incretin effect is also lost. GLP-1 secretion, on the other hand, is also impaired, but its insulinotropic and glucagon-suppressive actions are preserved, although the potency of GLP-1 in this respect is decreased compared to healthy subjects. However, in supraphysiological doses, GLP-1 administration may completely normalize beta as well as alpha cell sensitivity to glucose. The impaired action of GLP-1 and GIP in T2DM may be at least partly restored by improved glycaemic control, as shown in studies involving 4 weeks of intensive insulin therapy. The reduced incretin effect is believed to contribute to impaired regulation of insulin and glucagon secretion in T2DM, and, in support of this, exogenous GLP-1 administration may restore blood glucose regulation to near normal levels. Thus, the pathogenesis of T2DM seems to involve a dysfunction of both incretins. Enhancement of incretin action may therefore represent a therapeutic solution. Clinical strategies therefore include the development of metabolically stable activators of the GLP-1 receptor; and inhibition of DPP-4, the enzyme that destroys native GLP-1 almost immediately. Orally active DPP-4 inhibitors and the metabolically stable activators, exenatide (Byetta), are now on the market, and numerous clinical studies have shown that both principles are associated with durable antidiabetic activity.