Liraglutide, a modified form of glucagon-like peptide-1 (GLP-1), has been found to improve beta cell function in type 2 diabetes (T2DM). However, the effect of liraglutide on beta cell function under lipotoxic stress and the underlying molecular mechanisms remain unclear. In the present study, we investigated the role of PI3K/Akt/FoxO1 signaling in liraglutide-involved beta cell protection in high free fatty acids (FFAs) condition. The apoptosis, proliferation, and insulin secretion capability of MIN6 cells and islets from C57BL/6J mice were evaluated when exposed to FFAs with/without liraglutide. The expression of effectors involved in PI3K/Akt/FoxO1signalling pathway was detected by real-time PCR and western blotting in MIN6 cells and islets from C57BL/6J mice. Liraglutide substantially inhibited the lipoapoptosis and improved the proliferation and insulin secretion of beta cells in high FFAs condition. Western blot revealed that the phosphorylation of Akt and FoxO1 was markedly decreased under lipid stress but was elevated when treated with liraglutide. Moreover, FFAs could up-regulate the expression levels of p27, Bax, Cidea but down-regulate the expression levels of Pdx-1, MafA, and NeuroD in beta cells, which was canceled by the addition of liraglutide. Moreover, LY294002, a PI3K inhibitor, could significantly abrogate all the protective actions of liraglutide against lipotoxicity. We concluded that liraglutide markedly improved beta cell function under lipid stress and that the protective action of liraglutide was mediated by activation of PI3K/Akt, which resulted in inactivation of FoxO1 along with the down-regulation of p27, Bax, Cidea and up-regulation of Pdx-1, MafA, and NeuroD expressions. J. Cell. Biochem. 115: 1166–1175, 2014. © 2013 Wiley Periodicals, Inc.