Current type 2 diabetes therapies are mainly targeted at stimulating pancreatic beta-cell secretion and reducing insulin resistance. A number of alternative therapies are currently being developed to take advantage of the actions of the incretin hormones Glucagon-Like Peptide-1 (GLP-1) and Glucose-dependent Insulinotropic Polypeptide (GIP). These hormones are released from the small intestine in response to nutrient ingestion and stimulate insulin secretion in a glucose-dependent manner. One approach to potentiating their actions is based on inhibiting dipeptidyl peptidase IV (DPP IV), the major enzyme responsible for degrading the incretins in vivo. DPP IV exhibits characteristics that have allowed the development of specific orally administered inhibitors with proven efficacy in improving glucose tolerance in animal models of diabetes. A number of clinical trials have demonstrated that DPP IV inhibitors are effective in improving glucose disposal and reducing hemoglobin A1c levels in type 2 diabetic patients and one inhibitor, sitagliptin, is now in therapeutic use, with others likely to receive FDA approval in the near future. Studies aimed at elucidating the mode of action of the inhibitors are still ongoing. Both enhancement of insulin secretion and reduction in glucagon secretion, resulting from the blockade of incretin degradation, are believed to play important roles in DPP IV inhibitor action. Preclinical studies indicate that increased levels of incretins improve beta-cell secretory function and exert effects on beta-cell mitogenesis and survival that can preserve beta-cell mass. Roles for other hormones, neuropeptides and cytokines in DPP IV inhibitor-medicated responses are also possible.