BACKGROUND: Exenatide, a GLP-1 analogue, is used in combination with oral anti-diabetic agents in type 2 diabetes and obesity, and promotes weight loss. Exenatide use in combination with insulin in insulin-treated type 2 diabetes and obesity is unlicensed in the UK and outcomes are unclear. AIMS: To assess the effectiveness of exenatide in insulin-treated type 2 diabetes with obesity. DESIGN AND METHODS: This prospective study included 174 consecutive patients with insulin-treated type 2 diabetes and obesity initiated on exenatide in our out-patient, between October 2007 and November 2008. Weight, BMI, HbA1c, serum fructosamine, total cholesterol, HDL-cholesterol and insulin doses were recorded at baseline, 3, 6 and 12 months. Side effect profiles were recorded. RESULTS: Fourteen patients discontinued exenatide before 3 months of initiation, because of side effects, and were excluded. Data were analysed on remaining 160 people all of whom completed 6 months and 57 completed 12 months treatment. Mean weight loss was 10.7 +/- 5.7 kg and 12.8 +/- 7.5 kg (P < 0.001) at 6 and 12 months. Insulin doses dropped significantly (mean 144 +/- 90 U/day at baseline to 51 +/- 55 U/day and 55 +/- 53 U/day at 6 and 12 months). At 3 months, 25% came off insulin. There was little change in HbA1c. CONCLUSION: Exenatide therapy in insulin-treated type 2 diabetes and obesity was associated with very significant reductions in weight and insulin doses. Exenatide should be considered in people with type 2 diabetes on insulin and have obesity, weight gain and poor glycaemic control.