Recently, the inhibitor dipeptidyl peptidase-4 has been reported to be beneficial in the treatment of type 1 diabetes mellitus. For the first time, this study evaluates the effect of vildagliptin on β-cell neogenesis and lipid homeostasis in a later phase of type 1 diabetes. In Fischer rats, diabetes was induced with alloxan. After confirmation of diabetic status, the animals received no treatment for 30 days to establish a late phase of the disease these animals. After this period, the animals were treated with vildagliptin via gavage for 30 consecutive days. Fasting blood glucose, serum insulin, lipid profile and pancreatic histology were evaluated. Treatment with vildagliptin increased serum levels of insulin, improved beta cell function and improved the lipid profile. Histological analyses revealed that this treatment increased the populations of pancreatic β-cells in the diabetic animals. The treatment was effective in improving the mass and function of β-cells and contributed to lipid homeostasis, in an experimental model of type 1 diabetes.