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To investigate the rate of type 2 diabetes remission after gastric bypass and banding and establish the mechanism leading to remission of type 2 diabetes after bariatric surgery.Glycemic control in type 2 diabetic patients is improved after bariatric surgery.In study 1, 34 obese type 2 diabetic patients undergoing either gastric bypass or gastric banding were followed up for 36 months. Remission of diabetes was defined as patients not requiring hypoglycemic medication, fasting glucose below 7 mmol/L, 2 hour glucose after oral glucose tolerance test below 11.1 mmol/L, and glycated haemoglobin (HbA1c) <6%. In study 2, 41 obese type 2 diabetic patients undergoing either bypass, banding, or very low calorie diet were followed up for 42 days. Insulin resistance (HOMA-IR), insulin production, and glucagon-like peptide 1 (GLP-1) responses after a standard meal were measured.In study 1, HbA1c as a marker of glycemic control improved by 2.9% after gastric bypass and 1.9% after gastric banding at latest follow-up (P< 0.001 for both groups). Despite similar weight loss, 72% (16/22) of bypass and 17% (2/12) of banding patients (P = 0.001) fulfilled the definition of remission at latest follow-up. In study 2, within days, only bypass patients had improved insulin resistance, insulin production, and GLP-1 responses (all P< 0.05).With gastric bypass, type 2 diabetes can be improved and even rapidly put into a state of remission irrespective of weight loss. Improved insulin resistance within the first week after surgery remains unexplained, but increased insulin production in the first week after surgery may be explained by the enhanced postprandial GLP-1 responses.