The effects of Cyclo (His-Pro) (CHP), a cyclic dipeptide structurally related to thyrotropin-releasing hormone (TRH), on glucose metabolism, blood insulin level, lipid profile, and the viability of pancreatic cells were investigated in streptozotocin (STZ)-induced diabetic rats. The rats (Sprague-Dawley) with a blood glucose level above 300 mg/dL after induction with STZ (50 mg/kg of body weight) were considered to be diabetic and used for the treatment with CHP (4 mg/day/kg of body weight). The blood glucose level in the CHP-fed rats was reduced remarkably by approximately 56% as compared to the untreated diabetic group at 21 days of feeding. In an oral glucose tolerance test, blood glucose levels were restored to baseline at 120 min after CHP treatment, although the levels increased significantly after 30 min. Plasma insulin levels in the CHP-treated group were also enhanced by 2-fold compared to the untreated group. Triglyceride and total cholesterol levels in CHP-treated rats almost returned to normal levels. Moreover, histological examination showed that CHP treatment restored impaired ${eta}$-cells in the pancreas up to two-thirds of the normal level. The transcriptional level of C-reactive protein (CRP), used mainly as a marker of inflammation, was also restored mimicking normal level in the CHP-treated-group, suggesting that the ${eta}$-cells destroyed by STZ were, at least in part, recovered. Accordingly, CHP was concluded to have an excellent hypoglycemic effect by lowering average plasma glucose levels, increasing insulin secretion, and restoring the viability of pancreatic ${eta}$-cells in diabetic rats. We suggest that CHP might be a potential candidate to control Type I diabetes mellitus.