Xenin is a peptide that is co-secreted with the incretin hormone, glucose-dependent insulinotropic polypeptide (GIP), from intestinal K-cells in response to feeding. Studies demonstrate that xenin has appetite suppressive effects and modulates glucose-induced insulin secretion. The present study was undertaken to determine the bioactivity and antidiabetic properties of two C-terminal fragment xenin peptides, namely xenin 18-25 and xenin 18-25 Gln. In BRIN-BD11 cells, both xenin fragment peptides concentration-dependently stimulated insulin secretion, with similar efficacy as the parent peptide. Neither fragment peptide had any effect on acute feeding behaviour at elevated doses of 500 nmol/kg bw. When administered together with glucose to normal mice at 25 nmol/kg bw, the overall insulin secretory effect was significantly enhanced in both xenin 18-25 and xenin 18-25 Gln treated mice, with better moderation of blood glucose levels. Twice daily administration of xenin 18-25 or xenin 18-25 Gln for 21 days in high fat fed mice did not affect energy intake, body weight, circulating blood glucose or body fat stores. However, circulating plasma insulin concentrations had a tendency to be elevated, particularly in xenin 18-25 Gln mice. Both treatment regimens significantly improved insulin sensitivity by the end of the treatment period. In addition, sustained treatment with xenin 18-25 Gln significantly reduced the overall glycaemic excursion and augmented the insulinotropic response to an exogenous glucose challenge on day 21. In harmony with this, GIP-mediated glucose-lowering and insulin-releasing effects were substantially improved by twice daily xenin 18-25 Gln treatment. Overall, these data provide evidence that C-terminal octapeptide fragments of xenin, such as xenin 18-25 Gln, have potential therapeutic utility for type 2 diabetes.