Type 2 diabetes mellitus is a common, chronic and progressive metabolic disorder, which accounts for 90% of diabetes cases worldwide. Approximately 60% of individuals with the disease do not achieve target glycosylated hemoglobin levels, despite the availability of many antidiabetic agents. The two most important needs in the present management of diabetes are the ability of antidiabetic agents to exhibit prolonged efficacy in reducing hyperglycemia and to preserve beta-cell function. The incretin effect appears to be reduced in patients with type 2 diabetes. Exenatide is the first in a novel class of antidiabetic drugs that improves glycemic control in patients with type 2 diabetes through several physiological glucoregulatory mechanisms which improve the incretin effect. Overall, mean glycosylated hemoglobin (HbA1c) reductions achieved in the exenatide phase III clinical trials were in the order of 1%. Long-term data from the uncontrolled open-label extension studies indicate that adjunctive exenatide therapy leads to sustained improvements in HbA1c and progressive weight loss for at least 3 years. The drug is generally well tolerated. The most common adverse events were gastrointestinal in nature and mild to moderate in severity. The objective of this review is to discuss the available published evidence on exenatide therapeutic efficacy and tolerability, and the role of this new drug in the treatment of type 2 diabetes.