Dipeptidyl peptidase-IV (DPP-IV) inhibitors are a new class of oral antidiabetic agents for the treatment of patients with type 2 diabetes. Inhibition of the enzyme DPP-IV results in increased activity of glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic peptide (GIP), the incretin hormones. Through the action of GLP-1 and GIP, DPP-IV inhibitors improve preprandial and postprandial glucose by enhancing insulin secretion and reducing postprandial concentrations of glucagon. This review examines the background, current evidence, and future therapeutic potential of this novel class of drug.