Vildagliptin is an oral incretin enhancer that acts to increase active levels of the incretin hormone glucagon-like peptide-1 (GLP-1) by inhibiting the dipeptidyl peptidase-4 enzyme responsible for the rapid deactivation of GLP-1 in vivo. This activity results in improved glucose-dependent functioning of pancreatic islet beta and alpha cells, addressing two central deficits in type 2 diabetes mellitus (T2DM). Vildagliptin treatment improves beta-cell sensitivity to glucose, producing increased insulin secretory rate relative to glucose in both postprandial and fasting states. Improved alpha-cell function is shown as restoration of appropriate glucose-related suppression of glucagon and, therefore, reduced endogenous glucose production during both postprandial and fasting periods. There is evidence that long-term vildagliptin treatment may slow underlying deterioration of beta-cell function in T2DM. There is also a potential synergistic effect of vildagliptin and metformin in increasing active GLP-1 levels, and this activity may contribute to the long-term improvements in beta-cell function observed in patients with T2DM who have vildagliptin added to ongoing metformin therapy. Vildagliptin treatment has also been associated with beneficial extrapancreatic effects, including improved peripheral insulin sensitivity and improved postprandial triglyceride-rich lipoprotein metabolism. Improvement of beta- and alpha-cell function through incretin enhancement with vildagliptin results in more physiologic meal-related and fasting glycaemia profiles.