Glucose-dependent insulinotropic polypeptide (GIP) is a physiological insulin releasing peptide. We have developed two novel fatty acid derivatized GIP analogues, which bind to serum albumin and demonstrate enhanced duration of action in vivo. GIP(Lys(16)PAL) and GIP(Lys(37)PAL) were resistant to dipeptidyl peptidase IV (DPP IV) degradation. In vitro studies demonstrated that GIP analogues retained their ability to activate the GIP receptor through production of cAMP and to stimulate insulin secretion. Intraperitoneal administration of GIP analogues to obese diabetic (ob/ob) mice significantly decreased the glycemic excursion and elicited increased and prolonged insulin responses compared to native GIP. A protracted glucose-lowering effect was observed 24 h following GIP(Lys(37)PAL) administration. Once a day injection for 14 days decreased nonfasting glucose, improved glucose tolerance, and enhanced the insulin response to glucose. These data demonstrate that fatty acid derivatized GIP peptides represent a novel class of long-acting stable GIP analogues for therapy of type 2 diabetes.