Albumin-binding achieved by fatty-acylation to drugs is considered to be an effective means of prolonging the circulation lifetimes of short-lived peptides. Here, exendin-4 was modified with palmitic acid, and the particle size and albumin-binding of palmitic acid-conjugated exendin-4 (Pal-Ex4) purified was investigated and visualized. Additionally, its pharmacokinetics and pharmacodynamics were evaluated in diabetic rodents. Pal-Ex4 had a greater molecular size (∼125 nm) and its albumin-binding was 5.6-fold that of Ex4. Molecular imaging showed that the subcutaneous absorption of Pal-Ex4 was delayed until 24 h post-injection, whereas Ex4 was rapidly absorbed and distributed systemically. Pharmacokinetic and pharmacodynamic results confirmed these observations, for example, times to reach peak concentration and to achieve a blood glucose level nadir were greatly delayed versus Ex4, and the circulating half-life of Pal-Ex4 was much greater than that of Ex4. Consequently, the hypoglycemic degree of Pal-Ex4 (500 nmol/kg) was 4.2 fold greater than Ex4. Our results show that the extended hypoglycemic efficacy of Pal-Ex4 was due to (i) a delayed absorption due to micelle formation and (ii) an increased in vivo circulating half-life due to albumin-binding. We believe that this prototype of exendin-4 has considerable pharmaceutical potential as a systemic type 2 anti-diabetic treatment.