Aims: Sevelamer, a non-absorbable amine-based resin used for treatment of hyperphosphataemia, has been demonstrated to have a marked bile acid-binding potential alongside beneficial effects on lipid and glucose metabolism. The aim of this study was to investigate the glucose-lowering effect and mechanism(s) of sevelamer in patients with type 2 diabetes. Materials and Methods: In this double-blinded randomized controlled trial, we randomized 30 patients with type 2 diabetes to sevelamer (n = 20) or placebo (n = 10). Participants were subjected to standardized 4-hour liquid meal tests at baseline and after 7 days of treatment. The main outcome measure was plasma glucagon-like peptide-1 excursions as measured by area under the curve. In addition, blood was sampled for measurements of glucose, lipids, glucose-dependent insulinotropic polypeptide, C-peptide, glucagon, fibroblast growth factor-19, cholecystokinin and bile acids. Assessments of gastric emptying, resting energy expenditure and gut microbiota composition were performed. Results: Sevelamer elicited a significant placebo-corrected reduction in plasma glucose with concomitant reduced fibroblast growth factor-19 concentrations, increased de novo synthesis of bile acids, a shift towards a more hydrophilic bile acid pool and increased lipogenesis. No glucagon-like peptide-1-mediated effects on insulin, glucagon or gastric emptying were evident, which points to a limited contribution of this incretin hormone to the glucose-lowering effect of sevelamer. Furthermore, no sevelamer-mediated effects on gut microbiota composition or resting energy expenditure were observed. Conclusions: Sevelamer reduced plasma glucose concentrations in patients with type 2 diabetes by mechanisms that seemed to involve decreased intestinal and hepatic bile acid-mediated farnesoid X receptor activation.