The incretin mimetic exenatide improved glycemic control and reduced body weight in patients with type 2 diabetes inadequately controlled with metformin+/-a sulfonylurea. We assessed postprandial beta-cell function by mathematical modeling, independent of confounding effects from differing ambient glucose levels among treatments. Subjects were 63% males, 55+/-10 years, BMI 33+/-6 kg/m2, HbA1C 8.1+/-1.1% (+/- SD) randomized to 5 microg exenatide or placebo twice daily for 4 weeks. Subsequently, one arm remained at 5 microg twice daily, one arm escalated to 10 microg twice daily, and one treatment arm remained on placebo for 26 weeks. Subjects continued metformin+/-a sulfonylurea. A subset with meal tests at baseline and week 30 were analyzed (n=73). Outcome measures were the model-based beta-cell function parameters dose-response relating insulin secretion to glucose concentration, rate sensitivity, and potentiation. Exenatide reduced postprandial glucose excursions. Modeling predicted an upward shift of the beta-cell dose-response. Model-predicted insulin secretion rate at a reference glucose concentration increased 72% (10 microg), increased 40% (5 microg), or decreased 21% (placebo) at week 30 [ p=0.015 (10 microg); p=0.045 (5 microg); vs. placebo]. At week 30, the 2-hour post-meal to basal potentiation factor ratio was increased to 1.53+/-0.10 (10 microg; p=0.0142 vs. placebo) or 1.40+/-0.08 (5 microg; p=0.0402 vs. placebo) compared with 1.15+/-0.06 (placebo). Exenatide caused an upward shift of the beta-cell dose-response and enhanced potentiation of insulin secretion. This model suggests exenatide improved beta-cell function in patients with type 2 diabetes treated with metformin+/-a sulfonylurea.