The incretin hormone glucagon-like peptide-1 (GLP-1) is recognized as a promising candidate for the treatment of type 2 diabetes (T2D), with one of its mimetics, exenatide (synthetic exendin-4) having already been licensed for clinical use. We seek to further improve the therapeutic efficacy of exendin-4 (Ex-4) using innovative fusion protein technology. Here, we report the production in plants a fusion protein containing Ex-4 coupled with human transferrin (Ex-4-Tf) and its characterization. We demonstrated that plant-made Ex-4-Tf retained the activity of both proteins. In particular, the fusion protein stimulated insulin release from pancreatic β-cells, promoted β-cell proliferation, stimulated differentiation of pancreatic precursor cells into insulin-producing cells, retained the ability to internalize into human intestinal cells and resisted stomach acid and proteolytic enzymes. Importantly, oral administration of partially purified Ex-4-Tf significantly improved glucose tolerance, whereas commercial Ex-4 administered by the same oral route failed to show any significant improvement in glucose tolerance in mice. Furthermore, intraperitoneal (IP) injection of Ex-4-Tf showed a beneficial effect in mice similar to IP-injected Ex-4. We also showed that plants provide a robust system for the expression of Ex-4-Tf, producing up to 37 μg prEx-4-Tf/g fresh leaf weight in transgenic tobacco and 137 μg prEx-4-Tf/g freshweight in transiently transformed leaves of N. benthamiana. These results indicate that Ex-4-Tf holds substantial promise as a new oral therapy for type 2 diabetes. The production of prEx-4-Tf in plants may offer a convenient and cost-effective method to deliver the antidiabetic medicine in partially processed plant food products.