Type 2 diabetes mellitus (T2DM) is a chronic degenerative endocrine and metabolic disease with high mortality and morbidity, yet lacks effective therapeutics. We recently generated a novel fusion peptide INSR-IgG4Fc, Yiminsu (YMS), to facilitate the high-affinity binding and transportation of insulin. Thus, the aim of the present study was to determine whether the novel recombinant peptide, YMS, could contribute to restoring insulin sensitivity and glycaemic control in insulin resistance models and revealing its underlying mechanism. Palmitic acid (PA)-treated LO2 cells and high fat diet (HFD)-fed mice were treated with YMS. Therapeutic effects of YMS were measured using Western blotting, ELISA, qPCR, Histology and transmission electron microscopy. We observed that YMS treatment effectively improved insulin signaling in PA-treated LO2 cells and HFD-fed mice. Notably, YMS could significantly reduce serum levels of glucose, triglycerides, fatty acids and cholesterol without affecting the serum insulin levels. Moreover, our data demonstrated that YMS could restore glucose and lipid homeostasis via facilitating insulin transportation and reactivating PI3K/Akt signaling in both PA-treated cells and liver, gastrocnemius and brown fat of HFD-fed mice. Additionally, we noticed that the therapeutic effects of YMS was similar as rosiglitazone, a well-recognized insulin sensitizer. Our findings suggested that YMS is a potentially candidate for pharmacotherapy for metabolic disorders associated with insulin resistance, particularly in T2DM.