Aims Using psychological and quality of life assessment tools, we prospectively studied changes in health-related quality of life and emotional well-being in patients who had commenced GLP-1 analogue therapy (exenatide) and compared them with new insulin starters. Methods Two matched groups of patients with type 2 diabetes who had suboptimal glycaemic control on oral medication were assessed using a battery of well-validated psychological and quality of life tests at baseline, prior to commencement of treatment and then again after 6 months of continuous therapy, along with body mass index (BMI) and hemoglobin A1c (HbA1c) measurements. Results In the exenatide-treated patient group (n=71), treatment satisfaction was greater (P<.05), as was the well-being score, at 6 months (P<.05), and the Hospital Anxiety and Depression Scale scores were significantly reduced (P<.05) when compared with the insulin-treated group (n=67). This was also found to be independent of changes in BMI in an analysis of covariance calculation. The effect size (using Cohen's d) of these changes was however relatively small. Conclusions Although exenatide and insulin appear to have similar efficacy for the treatment of type 2 diabetes mellitus, there are several differences between them that could influence outcomes from a patient's perspective. Exenatide affects both physiological and psychological parameters. ‘Well-being’ generally tends to improve in exenatide-treated patients and could be used as an adjunctive therapy for depression in the context of diabetes. A larger study is required to confirm these interesting findings.