Incretin hormones such as glucagon-like peptide-1 (GLP-1) and the longer lasting analog exendin-4 show clinical promise for the treatment of diabetes because of glucoregulatory activities that enhance beta-cell function and growth, and actions in the central nervous system that induce satiety and decrease caloric intake. The actions of these peptides on insulin-responsive tissues is less clear, but recent advances indicate that chronic treatment with exendin-4 increases insulin sensitivity via two distinct mechanisms: one is attributable to changes in food intake and the subsequent improvements in glycemia; the second is largely independent of reductions in blood glucose. In addition, exendin-4 might also have direct effects on beta-cell neogenesis that are independent of insulin demand.