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Introduction: Liraglutide and sitagliptin were compared on glycemic control and all-cause healthcare costs over a 1-year period among older adults with type 2 diabetes (65–89 years) enrolled in a national Medicare Advantage Prescription Drug health plan. Methods: This was a retrospective study in which the index date was the first prescription fill for liraglutide or sitagliptin between 25 January 2010 and 31 December 2014. Post-index treatment persistence and glycosylated hemoglobin (HbA1c) at baseline and 1 year (± 90 days) post-index date were required. Patients were excluded if their record included use of insulin during the baseline period. Inverse probability of treatment weighting using stabilized weights was employed with final covariate adjusted regression modeling to estimate the primary outcome (mean change in HbA1c) and secondary outcomes (achieving glycemic goal and costs), each at 1-year post-index date. Results: Overall, 3056 patients met the selection criteria, of whom 218 filled prescriptions for liraglutide and 2838 for sitagliptin. Adjusted mean change in HbA1c at 1 year post-index was − 0.42 with liraglutide versus − 0.12 with sitagliptin (P = 0.0012). Adjusted odds of achieving the treatment goals of HbA1c < 7% and achieving an HbA1c reduction of ≥ 1% were higher for those on liraglutide than for those on sitagliptin (1.68, 95% confidence interval [CI] 1.25–2.24 and 1.76, 95% CI 1.31–2.36), respectively. Total healthcare costs in those achieving an HbA1c of < 7% were not significantly different between treatment groups but were higher within the liraglutide group for those achieving an HbA1c < 8%. Conclusions: When compared to sitagliptin, liraglutide was associated with greater achievement of an HbA1c < 7% over a 1-year period in an older population. This finding was not associated with a statistically significant increase in all-cause total healthcare costs, although costs were slightly higher in the liraglutide group than in the sitagliptin group. [ABSTRACT FROM AUTHOR]