Type 2 diabetes (T2D) is a complex condition characterised by the interaction between insulin resistance and beta cell dysfunction. C-peptide, a key biomarker of endogenous insulin secretion, has a role in diagnosing type 1 diabetes (T1D). However, its utility in T2D has not been extensively studied. This review provides an overview of the progression of C-peptide levels over time in T2D and discuss its interpretation in clinical settings. We reviewed current evidence on the relationship between C-peptide levels and response to antidiabetic drugs, as well as the utility of C-peptide testing in T2D treatment strategies. We also reviewed available evidence for C-peptide in predicting future outcomes in T2D. In this review, we hoped to clarify the value of C-peptide testing in understanding and managing T2D and to highlight areas where further research is needed.