Exenatide (synthetic exendin-4), a 39-amino acid peptide, was encapsulated in poly(DL-lactic-co-glycolic acid) (PLGA) microspheres as a sustained release delivery system for the therapy of type 2 diabetes mellitus. The microspheres were prepared by a double-emulsion solvent evaporation method and the particle size, surface morphology, drug encapsulation efficiency, in vitro release profiles and in vivo hypoglycemic activity were evaluated. The results indicated that the morphology of the exenatide PLGA microspheres presented as a spherical shape with smooth surface, and the particle sizes distributed from 5.8 to 13.6 µm. The drug encapsulation efficiency tested by micro-bicinchoninic acid (BCA) assay was influenced by certain parameters such as inner and outer aqueous phase volume, PLGA concentration in oil phase, polyvinyl alcohol (PVA) concentrations in outer aqueous phase. Moreover, in vitro release behaviors were also affected by some parameters such as polymer type, PLGA molecular, internal aqueous phase volume, PLGA concentration. The pharmacodynamics in streptozotocin (STZ)-induced diabetic mice suggested that, exenatide microspheres have a significant hypoglycemic activity within one month, and its controlling of plasma glucose was similar to that of exenatide solution injected twice daily with identical exenatide amount. In conclusion, this microsphere could be a well sustained delivery system for exenatide to treat type 2 diabetes mellitus.