Exenatide is a glucagon-like peptide 1 receptor agonist, which has recently received FDA approval in the US for the treatment of Type 2 diabetes. Exenatide is an incretin mimetic that improves glycaemic control in patients with diabetes through acute mechanisms, such as glucose-dependent stimulation of insulin secretion, suppression of inappropriate glucagon secretion and slowing of gastric emptying, as well as chronic mechanisms that include enhancement of β-cell mass in rodent studies and weight loss and inhibition of food intake in humans. This article reviews the mechanisms of exenatide action, as well as its efficacy in the treatment of Type 2 diabetes.