To test the effect of the glucagon-like peptide-1 receptor agonist, liraglutide, on residual beta-cell function in adults with newly diagnosed type 1 diabetes. In a multicentre, double-blind, parallel-group trial, adults with newly diagnosed type 1 diabetes and stimulated C-peptide of more than 0.2 nmol/L were randomized (1:1) to 1.8-mg liraglutide (Victoza) or placebo once daily for 52 weeks with 6 weeks of follow-up with only insulin treatment. The primary endpoint was the between-group difference in C-peptide area under the curve (AUC) following a liquid mixed-meal test after 52 weeks of treatment. Sixty-eight individuals were randomized. After 52 weeks, the 4-hour AUC C-peptide response was maintained with liraglutide, but decreased with placebo (P = .002). Six weeks after end-of-treatment, C-peptide AUCs were similar for liraglutide and placebo. The average required total daily insulin dose decreased from 0.30 to 0.23 units/kg/day with liraglutide, but increased from 0.29 to 0.43 units/kg/day in the placebo group at week 52 (P < .001). Time without the need for insulin treatment was observed in 13 versus two patients and lasted for 22 weeks (from 3 to 52 weeks) versus 6 weeks (from 4 to 8 weeks) on average for liraglutide and placebo, respectively. Patients treated with liraglutide had fewer episodes of hypoglycaemia compared with placebo-treated patients. The adverse events with liraglutide were predominantly gastrointestinal and transient. Treatment with liraglutide improves residual beta-cell function and reduces the dose of insulin during the first year after diagnosis. Beta-cell function was similar at 6 weeks postliraglutide treatment.