Glucagon-like peptide (GLP)-1 is an incretin hormone with well-characterized antidiabetic properties, including glucose-dependent stimulation of insulin secretion and enhancement of beta-cell mass. GLP-1 agonists have recently been developed and are now in clinical use for the treatment of type 2 diabetes. Rapid degradation of GLP-1 by enzymes including dipeptidyl-peptidase (DPP)-IV and neutral endopeptidase (NEP) 24.11, along with renal clearance, contribute to a short biological half-life, necessitating frequent injections to maintain therapeutic efficacy. Gene therapy may represent a promising alternative approach for achieving long-term increases in endogenous release of GLP-1. We have developed a novel strategy for glucose-regulated production of GLP-1 in hepatocytes by expressing a DPP-IV-resistant GLP-1 peptide in hepatocytes under control of the liver-type pyruvate kinase promoter. Adenoviral delivery of this construct to hepatocytes in vitro resulted in production and secretion of bioactive GLP-1 as measured by a luciferase-based bioassay developed to detect the NH2-terminally modified GLP-1 peptide engineered for this study. Transplantation of encapsulated hepatocytes into CD-1 mice resulted in an increase in plasma GLP-1 levels that was accompanied by a significant reduction in fasting plasma glucose levels. The results from this study demonstrate that a gene therapy approach designed to induce GLP-1 production in hepatocytes may represent a novel strategy for long-term secretion of bioactive GLP-1 for the treatment of type 2 diabetes.