The prevalence of type 2 diabetes (T2D) is rapidly increasing worldwide. Effective therapies, such as insulin and Glucagon-like peptide-1 (GLP-1), require injections, which are costly and result in less patient compliance. Here, we report the identification of a tripeptide with significant potential to treat T2D. The peptide, referred to as Diapin, is comprised of three natural L-amino acids, GlyGlyLeu. Glucose tolerance tests showed that oral administration of Diapin effectively lowered blood glucose after oral glucose loading in both normal C57BL/6J mice and T2D mouse models, including KKay, db/db, ob/ob mice, and high fat diet-induced obesity/T2D mice. In addition, Diapin treatment significantly reduced casual blood glucose in KKay diabetic mice in a time-dependent manner without causing hypoglycemia. Furthermore, we found that plasma GLP-1 and insulin levels in diabetic models were significantly increased with Diapin treatment compared to that in the controls. In summary, our findings establish that a peptide with minimum of three amino acids can improve glucose homeostasis and Diapin shows promise as a novel pharmaceutical agent to treat patients with T2D through its dual effects on GLP-1 and insulin secretion.