Glucagon-like peptide 1 (GLP-1) is potentially a very attractive agent for treating type 2 diabetes. We explored the effect of short-term (1 week) treatment with a GLP-1 derivative, liraglutide (NN2211), on 24-h dynamics in glycemia and circulating free fatty acids, islet cell hormone profiles, and gastric emptying during meals using acetaminophen. Furthermore, fasting endogenous glucose release and gluconeogenesis (3-3Hglucose infusion and 2H2O ingestion, respectively) were determined, and aspects of pancreatic islet cell function were elucidated on the subsequent day using homeostasis model assessment and first- and second-phase insulin response during a hyperglycemic clamp (plasma glucose ~16 mmol/l), and, finally, on top of hyperglycemia, an arginine stimulation test was performed. For accomplishing this, 13 patients with type 2 diabetes were examined in a double-blind, placebo-controlled crossover design. Liraglutide (6 μg/kg) was administered subcutaneously once daily. Liraglutide significantly reduced the 24-h area under the curve for glucose (P = 0.01) and glucagon (P = 0.04), whereas the area under the curve for circulating free fatty acids was unaltered. Twenty-four-hour insulin secretion rates as assessed by deconvolution of serum C-peptide concentrations were unchanged, indicating a relative increase. Gastric emptying was not influenced at the dose of liraglutide used. Fasting endogenous glucose release was decreased (P = 0.04) as a result of a reduced glycogenolysis (P = 0.01), whereas gluconeogenesis was unaltered. First-phase insulin response and the insulin response to an arginine stimulation test with the presence of hyperglycemia were markedly increased (P < 0.001), whereas the proinsulin/insulin ratio fell (P = 0.001). The disposition index (peak insulin concentration after intravenous bolus of glucose multiplied by insulin sensitivity as assessed by homeostasis model assessment) almost doubled during liraglutide treatment (P < 0.01). Both during hyperglycemia per se and after arginine exposure, the glucagon responses were reduced during liraglutide administration (P < 0.01 and P = 0.01). Thus, 1 week’s treatment with a single daily dose of the GLP-1 derivative liraglutide, operating through several different mechanisms including an ameliorated pancreatic islet cell function in individuals with type 2 diabetes, improves glycemic control throughout 24 h of daily living, i.e., prandial and nocturnal periods. This study further emphasizes GLP-1 and its derivatives as a promising novel concept for treatment of type 2 diabetes.