OBJECTIVE: Pharmacological inhibition with the dipeptidyl peptidase 4 (DPP-4) inhibitor vildagliptin prolongs the action of endogenously secreted incretin hormones leading to improved glycemic control in patients with type 2 diabetes mellitus (T2DM). We undertook a double-blinded, randomized-order, crossover study to examine the vildagliptin mechanisms of action on islet function and glucose utilization. Research DESIGN AND METHODS: Participants with T2DM (n = 16) who had a baseline hemoglobin A(1c) of 7.1 +/- 0.2% completed a crossover study with 6 wk of treatment with vildagliptin and 6 wk with placebo. At the completion of each arm, participants had a study of postprandial metabolism and a two-step glucose clamp performed at 20 and 80 mU/min x m(2) insulin infusions. RESULTS: Vildagliptin increased postprandial glucagon-like peptide-1 and glucose-dependent insulinotropic polypeptide by 3- and 2-fold, respectively, reduced fasting plasma glucose and postprandial plasma glucose by 1.3 +/- 0.3 mmol/liter and 1.6 +/- 0.3 mmol/liter (both P <0.01), and improved glucose responsiveness of insulin secretion by 50% (P < 0.01). Vildagliptin lowered postprandial glucagon by 16% (P <0.01). Examined by glucose clamp, insulin sensitivity and glucose clearance improved after vildagliptin (P < 0.01). CONCLUSIONS: Vildagliptin improves islet function in T2DM and improves glucose metabolism in peripheral tissues.