The prevalence of obesity-related diabetes is increasing worldwide. Here we report the identification of a pentapeptide, GLP-1(32-36)amide (LVKGRamide), derived from the glucoincretin hormone GLP-1, that increases basal energy expenditure and curtails the development of obesity, insulin resistance, diabetes, and hepatic steatosis in diet-induced obese mice. The pentapeptide inhibited weight gain, reduced fat mass without change in energy intake, and increased basal energy expenditure independent of physical activity. Analyses of tissues from peptide-treated mice reveal increased expression of UCP-1 and UCP-3 in brown adipose tissue and increased UCP-3 and inhibition of acetyl-CoA carboxylase in skeletal muscle, findings consistent with increased fatty acid oxidation and thermogenesis. In palmitate-treated C2C12 skeletal myotubes, GLP-1(32-36)amide activated AMPK and inhibited acetyl-CoA carboxylase, suggesting activation of fat metabolism in response to energy depletion. By mass spectroscopy, the pentapeptide is rapidly formed from GLP-1(9-36)amide, the major form of GLP-1 in the circulation of mice. These findings suggest that the reported insulin-like actions of GLP-1 receptor agonists that occur independently of the GLP-1 receptor might be mediated by the pentapeptide, and the previously reported nonapeptide (FIAWLVKGRamide). We propose that by increasing basal energy expenditure, GLP-1(32-36)amide might be a useful treatment for human obesity and associated metabolic disorders.