GPR40 is a G-protein coupled receptor regulating free fatty acid induced and also glucose induced insulin secretion. We generated neonatally-streptozotocin-treated female rats (n-STZ) and treated them with CNX-011-67, a GPR40 agonist to examine the role of GPR40 in modulation of glucose metabolism, insulin secretion and content. Female n-STZ animals were orally administered with CNX-011-67 (15 mg/kg body weight, twice daily) or with vehicle for 8 weeks (n = 8 per group). Glucose tolerance in treated animals and insulin secretion, islet insulin content and gene expression in isolated islets were determined. Islets from type 2 diabetic mellitus (T2DM) patients were treated with different concentrations of glucose in presence or absence of CNX-011-67 and insulin secretion was measured. Treatment of n-STZ rats with GPR40 agonist CNX-011-67 enhanced insulin secretion in response to oral glucose load on day 0 and this response persisted during the treatment period. The treatment also produced a ‘memory effect’ during which insulin secretion in response to oral glucose load remained enhanced, for a week, even in absence of the agonist. Activation of GPR40 enhanced responsiveness of islets to glucose and increased glucose induced insulin secretion and islet insulin content. An increase in islet mRNA expression of GCK, PDX1, insulin and PC was also observed. Acute treatment of islets from n-STZ rats with GPR40 agonist enhanced cellular ATP content. Activation of GPR40 enhanced mitochondrial calcium level in NIT-1 insulinoma cells. CNX-011-67 increased insulin secretion in islets from T2DM patients which were non-responsive to increased glucose concentration Our data provide evidence that activation of GPR40 with CNX-011-67 stimulates glucose metabolism, enhances glucose responsiveness, increases insulin secretion and content and that pharmacological activation of GPR40 will prove beneficial for treatment of T2DM.