Cyclic 3'5'AMP is an important physiological amplifier of glucose-induced insulin secretion by the pancreatic islet beta-cell, where it is formed by the activity of adenylyl cyclase, especially in response to the incretin hormones GLP-1 (glucagon-like peptide-1) and GIP (glucose-dependent insulinotropic peptide). These hormones are secreted from the small intestine during and following a meal, and are important in producing a full insulin secretory response to nutrient stimuli. Cyclic AMP influences many steps involved in glucose-induced insulin secretion and may be important in regulating pancreatic islet beta-cell differentiation, growth and survival. Cyclic AMP (CAMP) itself is rapidly degraded in the pancreatic islet beta-cell by cyclic nucleotide phosphodiesterase (POE) enzymes. This review discusses the possibility of targeting cAMP mechanisms in the treatment of type 2 diabetes mellitus, in which insulin release in response to glucose is impaired. This could be achieved by the use of GLP-1 or GIP to elevate cAMP in the pancreatic islet beta-cell. However, these peptides are normally rapidly degraded by dipeptidyl peptidase IV (DPP IV). Thus longer-acting analogues of GLP-1 and GIP, resistant to enzymic degradation, and orally active inhibitors of DPP IV have also been developed, and these agents were found to improve metabolic control in experimentally diabetic animals and in patients with type 2 diabetes. The use of selective inhibitors of type 3 phosphodiesterase (PDE3B), which is probably the important pancreatic islet beta-cell PDE isoform, would require their targeting to the islet beta-cell, because inhibition of PDE3B in adipocytes and hepatocytes would induce insulin resistance.