KBP-042 is a dual amylin and calcitonin receptor agonist that increases glucose tolerance and insulin action and reduces body weight in rat models of obesity and prediabetes. The objective of the present study was to 1) evaluate KBP-042 as a treatment of late-stage type 2 diabetes in a rat model and 2) assess the value of adding KBP-042 to the standard of care, metformin, to consider KBP-042 as a relevant drug for treating patients with type 2 diabetes. Two studies were included: an intervention study and a prevention study. In the intervention study, treatment with 5 µg/kg KBP-042 was initiated in 11-week-old Zucker diabetic fatty (ZDF) rats, in which glucose tolerance, fasting glycemia, and glycated hemoglobin were assessed after 4 weeks. In the prevention study, either metformin (400 mg/kg), KBP-042 (5 µg/kg), or a combination of both were administered to ZDF rats for a total of 9 weeks. Glycemia, glucose tolerance, and insulin tolerance were tested. Furthermore, fasting plasma insulin and glucagon levels were evaluated. Finally, pancreatic content of insulin was assessed as a surrogate marker of beta-cell mass. It was found that KBP-042 was efficient in lowering fasting plasma glucose as well as improving glucose tolerance, both as prevention and intervention of disease progression. Furthermore, KBP-042 was efficient in combination with metformin and had additional effects compared with either therapy alone. In conclusion, KBP-042 is a highly relevant therapeutic candidate against type 2 diabetes, effective both as an add-on therapy to metformin and as a stand-alone therapy.