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There is a rising worldwide prevalence of diabetes, especially type 2 diabetes mellitus (T2DM), which is one of the most challenging health problems in the 21st century. The associated complications of diabetes, such as cardiovascular disease, peripheral vascular disease, stroke, diabetic neuropathy, amputations, renal failure, and blindness result in increasing disability, reduced life expectancy, and enormous health costs. T2DM is a polygenic disease characterized by multiple defects in insulin action in tissues and defects in pancreatic insulin secretion, which eventually leads to loss of pancreatic insulin-secreting cells. The treatment goals for T2DM patients are effective control of blood glucose, blood pressure, and lipids (if elevated) and, ultimately, to avert the serious complications associated with sustained tissue exposure to excessively high glucose concentrations. Prevention and control of diabetes with diet, weight control, and physical activity has been difficult. Treatment of T2DM has centered on increasing insulin levels, either by direct insulin administration or oral agents that promote insulin secretion, improving sensitivity to insulin in tissues, or reducing the rate of carbohydrate absorption from the gastrointestinal tract. This review presents comprehensive and up-to-date information on the mechanism(s) of action, efficacy, pharmacokinetics, pleiotropic effects, drug interactions, and adverse effects of the newer antidiabetic drugs, including (1) peroxisome proliferator-activated-receptor-γ agonists (thiazolidinediones, pioglitazone, and rosiglitazone); (2) the incretin, glucagon-like peptide-) receptor agonists (incretin-mimetics, exenatide. and liraglutide), (3) inhibitors of dipeptidyl-peptidase-4 (incretin enhancers, sitagliptin, and vildagliptin), (4) short-acting, nonsulfonylurea secretagogue, meglitinides (repaglinide and nateglinide), (5) amylin anlog-pramlintide, (6) α-glucosidase inhibitors (miglitol and voglibose), and (7) colesevelam (a bile acid sequestrant). In addition, information is presented on drug candidates in clinical trials, experimental compounds, and some plants used in the traditional treatment of diabetes based on experimental evidence. In the opinion of this reviewer, therapy based on orally active incretins and incretin mimetics with long duration of action that will be efficacious, preserve the β-cell number/function, and block the progression of diabetes will be highly desirable. However, major changes in lifestyle factors such as diet and, especially, exercise will also be needed if the growing burden of diabetes is to be contained.