In our previous study, Atlantic salmon skin gelatin hydrolysed with flavourzyme possessed 42.5% DPP-IV inhibitory activity at the concentration of 5 mg/mL. The oral administration of hydrolysate (FSGH) at single dose of 300 mg/d in streptozotocin (STZ)-induced diabetic rats for 5 weeks was evaluated for its antidiabetic effect. During the 5-week experiment, body weight was increased, food and water intake were reduced by FSGH in diabetic rats. The daily administration of FSGH for 5 weeks was effective to lower the blood glucose levels of diabetic rats during oral glucose tolerance test (OGTT). After 5-week treatment, plasma dipeptidyl peptidase (DPP)-IV activity was inhibited; plasma active glucagon-like peptide-1 (GLP-1), insulin and insulin-to-glucagon ratio were increased by FSGH in diabetic rats. The results indicate that FSGH has the function of inhibiting GLP-1 degradation by DPP-IV, resulting in the enhancement of insulin secretion and improvement of glycemic control in STZ-induced diabetic rats.