Recently, oxyntomodulin (OXM) has emerged as a treatment option for type 2 diabetes mellitus and obesity. In order to develop more promising novel OXM derivatives combining glycemic effects of glucagon-like peptide-1 (GLP-1) and lipolytic properties of glucagon, six 12-mer GLP-1 receptor agonists (PP01-PP06) were screened using a phage display method and then fused to OXM (3-37) to generate hybrid OXM derivatives (PP07-PP12). PP11, as a selected starting point, was further site-specifically modified with three lengths of fatty acid chains to provide long-acting conjugates PP13-PP24, among which PP18 was found not only to retain almost the entire balanced activation potency of PP11 in GLP-1/glucagon receptors but also to enhance plasma stability and prolong hypoglycemic activity. PP18 was further confirmed as an insulin secretagogue and glycemic agent in gene knockout mice. The protracted antidiabetic effects and in vivo half-life of PP18 were further proved by hypoglycemic efficacies in diet-induced obesity (DIO) mice and pharmacokinetics tests in Sprague Dawley (SD) rats, respectively. Nevertheless, administration of PP18 once per day normalized food intake, body weight, blood biochemical indexes, insulin resistance and islet function of DIO mice. These preclinical results suggested that PP18, as a novel OXM-based dual GLP-1 and glucagon receptor agonist, may serve as a novel therapeutic approach to treat T2DM and obesity.