Administration of the truncated glucagon-like peptide 1 (GLP-1) has been considered for treatment of noninsulin-dependent diabetes mellitus (NIDDM). We studied its antidiabetogenic mechanism by examining its influences on islet function and peripheral insulin sensitivity in six subjects (aged 56-74 yr) with well-controlled NIDDM. Islet function was evaluated with arginine stimulation at three plasma glucose levels (fasting, 14 mmol/L, and > 28 mmol/L). GLP-1 (1.5 pmol/kg per min iv) increased serum insulin levels at fasting glucose (P = 0.028), at 14 mmol/L glucose (P = 0.028), and at 28 mmol/L glucose (P = 0.028). The acute insulin response (AIR) to 5 g iv arginine was increased by GLP-1 at 14 mmol/L glucose (P = 0.028), and the slopeAIR, i.e., the glucose potentiation of insulin secretion, was markedly increased by GLP-1 (P = 0.028). Plasma glucagon levels were reduced by GLP-1 (P = 0.028), and arginine-stimulated glucagon secretion (AGR) was inhibited by GLP-1 at 14 (P = 0.046) and 28 mmol/L glucose (P = 0.028). Glucose-induced inhibition of arginine-stimulated glucagon secretion (slopeAGR) was not significantly affected by GLP-1. In contrast, GLP-1 did not affect the low insulin sensitivity during a hyperinsulinemic, euglycemic clamp. Thus, GLP-1 improves islet dysfunction in diabetes, mainly by increasing the glucose-induced potentiation of insulin secretion. In contrast, the peptide does not seem to improve insulin resistance in NIDDM.