Metformin (Met) and liraglutide (Lira) are preferred diabetes therapies that may improve glycemia by modulating the gut microbiome, but the mechanisms and pathways are unknown and few data exist in youth-onset type 2 diabetes (Y-T2D). In a 3-month parallel clinical trial in African American Y-T2D randomized to Met (n = 14) or Met+Lira (n = 11), we compared gut microbial composition and metabolomic profiles and determined the relationship of changes in microbial abundance with glycemia and plasma metabolites. After 3 months, Met was associated with greater relative abundance of Eubacterium and Eubacterium rectale and lower Bacteroides ovates (p < 0.05). Met+Lira was associated with greater Bacteroides fragilis and lower Streptococcus thermophilus (p < 0.05). Met group had increased (>1.5-fold) plasma cholic secondary bile acids (sulfochenodeoxycholic acid, nutriacholic acid, alpha-muricholic acid, and C24 dihydroxy bile acid; p ≤ 0.002). The change in nutriacholic acid correlated with lower fasting glucose (r = -0.7, p < 0.05). Shifts in microbiota taxa were not associated with plasma short-chain fatty acids (SCFA), hemoglobin A1c or glucose. Short-term Met and Met+Lira in Y-T2D were related to distinct shifts toward bile acid and SCFA-producing gut microbiota taxa, and secondary bile acid metabolites correlated with improved glycemia, suggesting bile acid pathways may be important modulators of glycemia in youth on metformin.Clinical trials.gov identifier: NCT02960659.