This study is designed to look at how using glargine insulin with oral diabetes medications and exenatide may improve control of blood sugar levels and weight gain in type 2 diabetics.

The main study will last 32 weeks. However, all participants completing 32 weeks will be invited to continue for another 24 weeks taking the insulin and oral medication and exenatide treatment. This extension comparing insulin and oral medication with insulin and oral medication and exenatide will look at the long term weight loss/gain and blood sugar level control effects of this new drug regimen.

There is also a sub-study in the Clinical Research Center (CRC), which requires two 38-hour inpatient stays during the main study. This study offers the opportunity to study 24-hour blood sugar and metabolic patterns quantitatively.

Inclusion Criteria:

• Male or female patients with type 2 diabetes
• Taking metformin at least 1000 mg daily plus a secretagogue, an alpha glucosidase inhibitor, a thiazolidinedione, or a single injection of any kind of insulin up to 0.4 units/kg daily for > 3 months
• Age range 30 to 70 years
• Body mass index 25-45 kg/m2
• HbA1c 7.0 to 10.0% (or 7.0 to 8.5% if the second antihyperglycemic agent is insulin)
• Less than 50% of randomized participants will have used insulin previously

Exclusion Criteria:

• Use of more than two antihyperglycemic agents within the last 3 months
• Use of more than one daily injection of any kind of insulin in the last 3 months
• Positive anti-GAD antibody (test required in screening)
• Fasting C-peptide <0.5 ng/mL (test required in screening)
• Pregnancy (test required in screening if able to conceive) or lactation
• Excessive use of alcohol or evidence of other form of drug dependency
• Unwillingness or inability to grant informed consent
• Unwillingness or inability to perform self-monitoring of blood glucose
• Unwillingness or inability to inject insulin and/or inject exenatide
• Serum creatinine >1.3 mg/dL in women or 1.4 in men
• Retinopathy which has required photocoagulation for treatment
• Major active systemic illness (e.g. neoplastic disorder, symptomatic ischemic heart disease, congestive heart failure) that might interfere with performing the study protocol
• Clinically significant gastrointestinal disorder including prior gastric or intestinal surgery for weight-control
• Ongoing use of any drug (e.g. narcotic analgesic, tricyclic antidepressant) that might alter gastric emptying
• Use prednisone or other systemic glucocorticoid drug in the last 3 months
• Use of any drug for weight-control (e.g. sibutramine, phentermine, orlistat) in the last 3 months
• Use of any unproven investigational drug within the last 3 months