The incretin effect is a phenomenon in which enteral glucose administration provokes greater insulin secretion than intravenous administration. The main incretins, glucose-dependent insulinotropic peptide and glucagon-like peptide (GLP)-1 are defective in Type 2 diabetes; whereas glucose-dependent insulinotropic peptide displays diminished effectiveness, GLP-1 secretion is decreased; thus, GLP-1 was a stronger candidate for a new class of anti-diabetic agents designed to potentiate the incretin effect. In the past decade, GLP-1 mimetics, peptidase inhibitors and GLP-1 have been developed. Early randomised trials show that these agents contribute to glucose homeostasis and enhance beta-cell function, without causing hypoglycaemia or weight gain. This review includes an historical perspective, physiology of incretins, and discussions of the pathophysiology in Type 2 diabetes, pharmacology of the main agents and randomised clinical trials published to date.