Basic research on the cellular mechanisms that control the expression of the gene encoding glucagon has led to the discovery of proglucagon. This precursor is processed by tissue-specific proteolysis to produce glucagon in pancreatic alpha-cells and a glucagon-like peptide-1 (GLP-1) in the intestine. GLP-1 is a hormone that is released by intestinal cells into the circulation in response to food intake. GLP-1 and gastric inhibitory peptide (GIP) which has also been termed glucose-dependent insulinotropic peptide appear to account for most of the incretin effect in the augmentation of glucose-stimulated insulin secretion. These two hormones have specific beta-cell receptors that are coupled to GTP binding proteins to induce production of cyclic AMP and activation of cyclic AMP-dependent protein kinase. It is proposed that at least one factor contributing to the pathogenesis of non-insulin-dependent diabetes mellitus (NIDDM) is desensitization of the GLP-1 receptor on beta-cells. At pharmacological doses, infusion of GLP-1, but not of GLP, can improve and enhance postprandial insulin response in NIDDM patients. Agonists of GLP-1 receptor have been proposed as new potential therapeutic agents in NIDDM patients. The observations that GLP-1 induces both secretion and production of insulin, and that its activities are mainly glucose-dependent, led to the suggestion that GLP-1 may present a unique advantage over sulfonylurea drugs in the treatment of NIDDM.