The aim of this study was to assess the efficacy and tolerability of the dipeptidyl peptidase-4 inhibitor, sitagliptin, in patients with type 2 diabetes who have inadequate glycaemic control on diet and exercise. In a randomised, double-blind, placebo- and active-controlled study, 743 patients with type 2 diabetes and a mean baseline HbA1c of 7.9% were randomised to receive one of six treatments for 12 weeks: placebo, sitagliptin 5, 12.5, 25 or 50 mg b.i.d., or glipizide 5 mg/day (electively titrated up to 20 mg/day). At week 12, treatment with sitagliptin at all doses tested led to a significant (p < 0.001) reduction in HbA1c relative to placebo, with the largest reductions occurring in the 50-mg b.i.d. group. The placebo-subtracted differences in HbA1c for the sitagliptin dose groups ranged from −0.38% to −0.77% in a dose-dependent manner, and −1.00% in the glipizide group. Sitagliptin also produced significant reductions in fasting plasma glucose and mean daily glucose across the dose range studied. Sitagliptin treatment was well tolerated and resulted in no significant weight change relative to placebo. There was a modest weight gain observed with glipizide treatment relative to placebo. Hypoglycaemia adverse experiences were reported with the highest incidence in the glipizide group (17%) compared with the placebo (2%) or sitagliptin groups (0–4%, not dose-dependent). In summary, in this study sitagliptin improved glycaemic control, with 50 mg b.i.d. being the most effective dose, and was generally well-tolerated in patients with type 2 diabetes.