We studied the effect of a novel dipeptidyl peptidase IV (DPP IV) inhibitor, DA-1229, on blood glucose profile and pancreatic β-cell mass in established diabetes after streptozotocin (STZ) treatment. Mice that developed diabetes after administration of STZ 100mg/kg were treated with DA-1229 for 13 weeks. DA-1229 significantly reduced plasma DPP IV activity, and enhanced glucagon-like peptide 1 (GLP-1) levels. In STZ-treated mice fed DA-1229 (STZ-DA), blood glucose levels were significantly lower than those in diabetic mice fed normal chow (STZ-NC). Basal and glucose-stimulated insulin secretion and glucose tolerance assessed by intraperitoneal glucose tolerance test were significantly improved by DA-1229 administration. Volume density of β-cell was significantly increased in STZ-DA mice compared to STZ-NC mice, suggesting that DA-1229-mediated amelioration of established diabetes was due to beneficial effect of DA-1229 on β-cell mass. The number of replicating β-cells and that of scattered small β-cell unit representing β-cell neogenesis were significantly increased in STZ-DA mice compared to STZ-NC mice, explaining increased β-cell mass by DA-1229. The expression of PDX-1, a downstream mediator of GLP-1 action, was increased in islets of STZ-DA mice compared to STZ-NC mice. These results suggest a therapeutic potential of DA-1229 in diabetes, particularly that associated with decreased β-cell mass.