Incretins such as glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide 1 (GLP-1) are intestinal hormones that are released in response to ingestion of nutrients, especially carbohydrate. They have a number of important biological effects, which include release of insulin, inhibition of glucagon and somatostatin, maintenance of beta-cell mass, delay of gastric emptying, and inhibition of feeding. These properties allow them to be potentially suitable agents for the treatment of type 2 diabetes (T2D). Incretin receptors are also present in other parts of the body including the brain, where their effects are beginning to be understood and their relevance to disorders of nutrition and ageing are being explored. There is currently a pandemic of obesity and diabetes, and existing treatments are largely inadequate in regard to efficacy as well as their ability to tackle important factors in the pathogenesis of T2D. There is increasing evidence that current treatments do not address the issue of progressive P-cell failure in T2D. As obesity is the engine that is driving the epidemic of diabetes, it is disappointing that most treatments that succeed in lowering plasma glucose are also associated with weight gain. It is now well established that intensively treated T2D has a better outcome than standard treatment. Consequently, achieving better control of diabetes with lower HbA1c is the goal of optimal treatment. Despite the use of usual therapeutic agents in T2D, often in high doses and as combinations, such as metformin, sulphonylurea, alpha-glycosidase inhibitors, thiazolidinediones and a number of animal and human insulin preparations, optimal control of glycaemia is not achieved. The use of incretins as therapeutic agents offers a new approach to the treatment of T2D. Incretin metabolism is abnormal in T2D, evidenced by a decreased incretin effect, reduction in nutrient-mediated secretion of GIP and GLP-1 in T2D, and resistance to GIP. GLP-1, on the other hand, when administered intravenously in T2D is able to increase insulin secretion and improve glucose homeostasis. As GLP-1 has a very short half-life, due to rapid degradation by the enzyme dipeptidyl peptidase IV (DPPIV), analogues of GIP and GLP-1 that are resistant to the action of DPPIV have been developed and clinical trials have shown their effectiveness. Another novel agent, naturally resistant to DPPIV that is given by subcutaneous injection is a synthetic peptide called exenatide, has recently been approved for treatment of T2D in the USA. Efforts are underway to develop agents that can be given orally and include a DPPIV inhibitor that has been licensed for the treatment of T2D in the USA, and several other agents are undergoing clinical trials. Strategies to augment the biological actions of GIP and/or GLP-1 in T2D are expected to minimise weight gain, reduce hypoglycaemic episodes and prevent progressive beta-cell failure by increasing P-cell mass. The optimal agent(s) that may mimic and replace the endogenous incretin effect is not fully known and awaits the outcome of clinical trials that are still ongoing. The potential therapeutic role in non-diabetic states, including obesity and neurodegenerative disease, is intriguing and depends upon results from ongoing research.