Basic research on the cellular mechanisms that control the expression of the gene encoding glucagon has led to the discovery of proglucagon, which is processed alternatively by tissue-specific proteolysis to produce glucagon in the pancreatic alpha cells and a GLP-1 in the intestines. GLP-1 hormone is released into the circulation from intestinal L cells in response to meals and is the most potent incretin hormone known; GLP-1 and GIP appear to account for most, if not all, of the intestinal incretin effect in the augmentation of glucose-stimulated insulin secretion. Analyses of the mechanisms of action of GLP-1 and of glucose on isolated cultured rat beta cells using patch-clamp techniques to record ion channel activities has led to the glucose competence concept in which the combined glucose-signaling and GLP-1/cAMP-signaling pathways are required to affect depolarization of beta cells and to thereby stimulate insulin secretion. It is hypothesized that, among other possible target channels, the K-ATP channel is key first event in GLP-1/glucose-mediated activation of the beta cell secretory response. It is proposed that at least one factor contributing to the pathogenesis of NIDDM is a desensitization of the GLP-1 receptor on beta cells induced by the hypersecretion of GLP-1. Because of the discoveries that GLP-1 stimulates both secretion and production of insulin, and that the actions of GLP-1 are entirely glucose-dependent, GLP-1 may provide unique advantages over the sulfonylurea drugs in the treatment of NIDDM.