G-protein-coupled receptor 40 (GPR40), highly expressed in pancreatic β-cells, mediates free fatty acid (FFA)-induced insulin secretion. This phase I, double-blind, randomized study investigated the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of a novel, glucose-lowering GPR40 agonist, TAK-875 (q.d., orally × 14 days), in type 2 diabetics (placebo, n = 14; at 25, 50, 100, 200, or 400 mg, n = 45). Approximately dose-proportional increases in AUC(0-24) and C(max) occurred. TAK-875 showed good tolerability with no dose-limiting side effects. Two subjects (on TAK-875) had mild hypoglycemia, probably related to prolonged fasting after oral glucose tolerance tests (OGTTs). TAK-875 showed reductions from baseline in fasting (2 to -93 mg/dl) and post-OGTT glucose (26 to -172 mg/dl), with an apparent dose-dependent increase in post-OGTT C-peptide over 14 days. Consistent with preclinical data, TAK-875 apparently acts as a glucose-dependent insulinotropic agent with low hypoglycemic risk. Its PK is suitable for once-daily oral administration.