We report the efficacy of a new peptide with agonism at the glucagon and GLP-1 receptors that has potent, sustained satiation-inducing and lipolytic effects. Selective chemical modification to glucagon resulted in a loss of specificity, with minimal change to inherent activity. The structural basis for the co-agonism appears to be a combination of local positional interactions and a change in secondary structure. Two co-agonist peptides differing from each other only in their level of glucagon receptor agonism were studied in rodent obesity models. Administration of PEGylated peptides once per week normalized adiposity and glucose tolerance in diet-induced obese mice. Reduction of body weight was achieved by a loss of body fat resulting from decreased food intake and increased energy expenditure. These preclinical studies indicate that when full GLP-1 agonism is augmented with an appropriate degree of glucagon receptor activation, body fat reduction can be substantially enhanced without any overt adverse effects.