The intestinal peptides GLP-1 and GIP potentiate glucose-mediated insulin release. Agents that increase GLP-1 action are effective therapies in type 2 diabetes mellitus (T2DM). However, GIP action is blunted in T2DM, and GIP-based therapies have not been developed. Thus, it is important to increase our understanding of the mechanisms of GIP action. We developed mice lacking GIP-producing K cells. Like humans with T2DM, "GIP/DT" animals exhibited a normal insulin secretory response to exogenous GLP-1 but a blunted response to GIP. Pharmacologic doses of xenin-25, another peptide produced by K cells, restored the GIP-mediated insulin secretory response and reduced hyperglycemia in GIP/DT mice. Xenin-25 alone had no effect. Studies with islets, insulin-producing cell lines, and perfused pancreata indicated xenin-25 does not enhance GIP-mediated insulin release by acting directly on the beta-cell. The in vivo effects of xenin-25 to potentiate insulin release were inhibited by atropine sulfate and atropine methyl bromide but not by hexamethonium. Consistent with this, carbachol potentiated GIP-mediated insulin release from in situ perfused pancreata of GIP/DT mice. In vivo, xenin-25 did not activate c-fos expression in the hind brain or paraventricular nucleus of the hypothalamus indicating that central nervous system activation is not required. These data suggest that xenin-25 potentiates GIP-mediated insulin release by activating non-ganglionic cholinergic neurons that innervate the islets, presumably part of an enteric-neuronal-pancreatic pathway. Xenin-25, or molecules that increase acetylcholine receptor signaling in beta-cells, may represent a novel approach to overcome GIP resistance and therefore treat humans with T2DM.