In a clinical study, tirzepatide, a glucose-dependent insulinotropic polypeptide/glucagon-like peptide-1 receptor agonist (GIP/GLP-1RA), provided superior glycemic control vs the GLP-1RA semaglutide. The physiologic mechanisms are incompletely understood. To evaluate treatment effects by model-based analyses of mixed-meal tolerance test (MMTT) data. A 28-week double-blind, randomized, placebo-controlled trial. Two clinical research centers in Germany. Patients with type 2 diabetes treated with metformin. Tirzepatide 15 mg, semaglutide 1 mg, placebo. Glycemic control, model-derived β-cell function indices including insulin secretion rate (ISR) at 7.2-mmol/L glucose (ISR7.2), β-cell glucose (β-CG) sensitivity, insulin sensitivity, and estimated hepatic insulin-to-glucagon ratio. Tirzepatide significantly reduced fasting glucose and MMTT total glucose area under the curve (AUC) vs semaglutide (P < 0.01). Incremental glucose AUC did not differ significantly between treatments; therefore, greater total glucose AUC reduction with tirzepatide was mainly attributable to greater suppression of fasting glucose. A greater reduction in total ISR AUC was achieved with tirzepatide vs semaglutide (P < 0.01), in the context of greater improvement in insulin sensitivity with tirzepatide (P < 0.01). ISR7.2 was significantly increased with tirzepatide vs semaglutide (P < 0.05), showing improved β-CG responsiveness. MMTT-derived β-CG sensitivity was increased but not significantly different between treatments. Both treatments reduced fasting glucagon and total glucagon AUC, with glucagon AUC significantly reduced with tirzepatide vs semaglutide (P < 0.01). The estimated hepatic insulin-to-glucagon ratio did not change substantially with either treatment. These results suggest that the greater glycemic control observed for tirzepatide manifests as improved fasting glucose and glucose excursion control, due to improvements in ISR, insulin sensitivity, and glucagon suppression.