GLP-1 is a peptide derived from differential processing of the precursor for the hormone glucagon. It is secreted predominantly by endocrine cells in the gut epithelium in response to nutrient stimulation. Studies from the last 35 years have given us an idea about its physiological functions. On the basis of some of its many actions, it has also been developed into a pharmaceutical agent for the treatment of obesity and type 2 diabetes (T2DM). It is currently positioned as the most effective anti-obesity agent available and is recommended in both national and international guidelines as an effective second-in line treatment for T2DM, in particular in patients with increased cardiovascular risk. In this review, I first discuss whether the processing of proglucagon may also result in GLP-1 formation in the pancreas and in glucagon in the gut. Next, I discuss the relationship between the physiological actions of GLP-1 and the therapeutic effects of the GLP-1 receptor agonists, which are far from being congruent and generally poorly understood. These relationships illustrate both the difficulties and the benefits of bridging results obtained in the laboratory with those emerging from the clinic. This article is protected by copyright. All rights reserved.