Glucagon-like peptide-1 (GLP-1) is an intestinally derived insulinotropic hormone currently under investigation for use as a novel therapeutic agent in the treatment of type 2 diabetes. One of several important effects of GLP-1 is on nutrient-induced pancreatic hormone release and is mediated by binding to a specific G-protein coupled receptor resulting in the activation of adenylate cyclase and an increase in cAMP generation. In the beta-cell, cAMP binds and modulates activities of both protein kinase A and cAMP-regulated guanine nucleotide exchange factor II, thereby enhancing glucose-dependent insulin secretion. The stimulatory action of GLP-1 on insulin secretion involves interaction with a plethora of signal transduction processes including ion channel activity, intracellular Ca(2+) handling and exocytosis of the insulin-containing granules. In this review we focus principally on recent advances in our understanding on the cellular mechanisms proposed to underlie GLP-1's insulinotropic effect and attempt to incorporate this knowledge into a working model for the control of insulin secretion. Lastly, this review discusses the applicability of GLP-1 as a therapeutic agent for the treatment of type 2 diabetes.