Dipeptidyl peptidase IV (DPP-IV) degrades the incretin hormone glucagon-like peptide 1 (GLP-1). Small molecule DPP-IV inhibitors have been used as treatments for type 2 diabetes to improve glucose tolerance. However, each of the marketed small molecule drugs has its own limitation in terms of efficacy and side effects. To search for an alternative strategy of inhibiting DPP-IV activity, we generated a panel of tight binding inhibitory mouse monoclonal antibodies (mAbs) against rat DPP-IV. When tested in vitro, these mAbs partially inhibited the GLP-1 cleavage activity of purified enzyme and rat plasma. To understand the partial inhibition, we solved the co-crystal structure of one of the mAb Fabs (Ab1) in complex with rat DPP-IV. Although Ab1 does not bind at the active site, it partially blocks the side opening, which prevents the large substrates such as GLP-1 from accessing the active site, but not small molecules such as sitagliptin. When Ab1 was tested in vivo, it reduced plasma glucose and increased plasma GLP-1 concentration during an oral glucose tolerance test in rats. Together, we demonstrated the feasibility of using mAbs to inhibit DPP-IV activity and to improve glucose tolerance in a diabetic rat model.