Type 2 diabetes mellitus remains a critical global health challenge, driving the pursuit of novel therapeutic strategies. This study investigated the anti-diabetic efficacy of the peptide 1CBR, derived from sodium caseinate hydrolysate, administered orally at 25 mg/kg/day to db/db mice over a 4-week period. Glucose tolerance was evaluated via oral glucose tolerance tests (OGTT), while plasma dipeptidyl peptidase-IV (DPP-IV) activity, glucagon-like peptide-1 (GLP-1), and insulin concentrations were quantified using enzyme-linked immunosorbent assays (ELISA). Two bioactive peptides, GPFPLPD and APDSGNFR, were isolated and characterized, exhibiting half-maximal inhibitory concentrations (IC₅₀) of 99.12 µM and 73.07 µM for DPP-IV inhibition, respectively, and both significantly stimulated GLP-1 secretion in enteroendocrine cells in vitro. Pharmacokinetic analysis in Sprague–Dawley rats demonstrated oral bioavailability of 11.28% and 19.12% for these peptides, surpassing typical expectations for peptide-based agents. Collectively, these results provide compelling evidence that 1CBR-derived peptides exert glucose-lowering effects through the dual mechanisms of DPP-IV inhibition and GLP-1 stimulation, combined with favorable oral absorption profiles. These findings underscore the potential of 1CBR peptides as promising candidates for development into nutraceuticals or pharmaceutical agents for diabetes management.