There is an unmet need for pharmacological therapies for children with type 2 diabetes mellitus (T2DM). We assessed the efficacy and safety of an oral dipeptidyl peptidase-4 inhibitor, alogliptin, 25 mg once daily (QD), as a potential treatment for pediatric patients with T2DM. This phase 3, 52-week, multicenter, randomized, double-blind, placebo-controlled trial was conducted in children and adolescents (10–17 years old) with T2DM. Participants had glycosylated hemoglobin (HbA1c) ≥ 6.5% at baseline (≥ 6.5% to < 11% without treatment or on metformin alone; ≥ 7.0% to < 11% on insulin alone or in combination with metformin). Where required, participants underwent prerandomization stabilization of their background metformin and/or insulin therapy. All received diabetes education and home glucose-monitoring training (during screening, prerandomization stabilization, and specified visits through week 26). Participants were then stratified based on previous antihyperglycemic therapy for 12 weeks before screening into schedule A (antihyperglycemic treatment-naïve) or B (metformin and/or insulin). The primary efficacy endpoint was change in HbA1c levels from baseline at week 26. Safety was assessed as a secondary endpoint at week 52. Overall, 152 participants (median age, 14 years; 68.9% female) were randomized (1:1) to receive either alogliptin (n = 75) or placebo (n = 77). The majority were white (58.3%), had a body mass index of ≥ 30 kg/m2 (60.3%), and had received previous antihyperglycemic therapy (82.1%). The difference in HbA1c levels from baseline to week 26 between the alogliptin and placebo groups (least squares mean change [95% confidence interval]) was 0.10 (− 0.63, 0.83; p = 0.78). There was no difference in efficacy endpoints between alogliptin and placebo across both subgroups. No new safety concerns were observed with alogliptin treatment. Alogliptin 25 mg QD did not significantly improve glycemic control versus placebo in pediatric patients with T2DM. Alogliptin treatment was safe and well tolerated, and no new safety concerns were observed in this study. ClinicalTrials.gov: NCT02856113; EudraCT: 2015-000208-25.