After the ingestion of fat- and glucose-rich meals, gut hormones are secreted into the circulation in order to stimulate insulin secretion. This so-called "incretin effect" is primarily conferred by Glucagon-like peptide 1 (GLP-1) and Gastric Inhibitory Polypeptide (GIP). In contrast to GLP-1, GIP has lost most of its insulinotropic effect in type 2 diabetic patients. In addition to its main physiological role in the regulation of endocrine pancreatic secretion, GIP exerts various peripheral effects on adipose tissue and lipid metabolism, thereby leading to increased lipid deposition in the postprandial state. In some animal models, an influence on gastrointestinal functions has been described. However, such effects do not seem to play an important role in humans. During the last years, the major line of research has focussed on GLP-1, due to its promising potential for the treatment of type 2 diabetes mellitus. However, the physiological importance of GIP in the regulation of insulin secretion has been shown to even exceed that of GLP-1. Furthermore, work from various groups has provided evidence that GIP contributes to the pathogenesis of type 2 diabetes to a considerable degree. Recent data with modified GIP analogues further suggested a possibility of therapeutic use in the treatment of type 2 diabetes. Thus, it seems worthwhile to refocus on this important and-sometimes-neglected incretin hormone. The present work aims to review the physiological functions of GIP, to characterize its role in the pathogenesis of type 2 diabetes, and to discuss possible clinical applications and future perspectives in the light of new findings.