This trial is conducted in Europe. The trial is designed to show the effect of treatment with liraglutide or placebo on blood glucose control after 14 weeks in subjects with type 2 diabetes. Liraglutide or placebo is administered by injection once daily in the evening. The trial is a multi-national trial with treatment concealed to participating subjects, investigators and the sponsor. Treatment allocation is random with equal chance of being assigned to each group.

Inclusion Criteria:

• Subjects diagnosed with type 2 diabetes mellitus and treated with either diet or single oral drug therapy
• Diet treated subjects: 7.5% < HbA1c < 10%
• Single oral drug therapy subjects: 7.0% < HbA1c < 9.5%
• Body Mass Index (BMI): max 40 kg/m^2

Exclusion Criteria:

• Subjects treated with thiazolidinediones or insulin
• Subjects with any serious medical conditions