Combined modulation of peptide hormone receptors including, glucagon-like peptide-1 (GLP-1), glucose-dependent insulinotropic polypeptide (GIP) and xenin, have established benefits for the treatment of diabetes. The present study has assessed the biological actions and therapeutic efficacy of a novel exendin-4/xenin-8-Gln hybrid peptide, both alone and in combination with the GIP receptor agonist (DAla2)GIP. Exendin-4/xenin-8-Gln was enzymatically stable and exhibited enhanced insulin secretory actions when compared to its parent peptides. Exendin-4/xenin-8-Gln also possessed ability to potentiate the in vitro actions of GIP. Acute administration of exendin-4/xenin-8-Gln in mice induced appetite suppressive effects, as well as significant and protracted glucose-lowering and insulin secretory actions. Twice daily administration of exendin-4/xenin-8-Gln, alone or in combination with (DAla2)GIP, for 21-days significantly reduced non-fasting glucose and increased circulating insulin levels in high fat fed mice. In addition, all exendin-4/xenin-8-Gln treated mice displayed improved glucose tolerance, insulin sensitivity and metabolic responses to GIP. Combination therapy with (DAla2)GIP did not result in any obvious further benefits. Metabolic improvements in all treatment groups were accompanied by reduced pancreatic beta-cell area and insulin content, suggesting reduced insulin demand. Interestingly, body weight, food intake, circulating glucagon, metabolic rate and amylase activity were unaltered by the treatment regimens. However, all treatment groups, barring (DAla2)GIP alone, exhibited marked reductions in total- and LDL-cholesterol. Furthermore, exendin-4 therapy also reduced circulating triacylglycerol. This study highlights the positive antidiabetic effects of exendin-4/xenin-8-Gln, and suggests that combined modulation of GLP-1 and xenin related signalling pathways represents an exciting treatment option for type 2 diabetes.