Type 2 diabetes is a multifactorial disease and drugs with multifunctional properties are required. The peptide, SQSPA, was reported to be a potent and gastrointestinally stable α-glucosidase inhibitory peptide. In this study, the structure-activity relationship of this peptide was studied using alanine scanning. Four analogs; AQSPA, SASPA, SQAPA and SQSAA were designed and investigated for multifunctional antidiabetic effects. Molecular docking studies on human dipeptidyl peptidase-IV (DPP-IV) suggested that the binding affinities were in the order; AQSPA>SASPA>SQSPA>SQSAA>SQAPA while for in vitro DPP-IV inhibitory activity, it was SQSPA>SQSAA>AQSPA>SASPA>SQAPA. Enzyme kinetic studies revealed that the peptides are uncompetitive inhibitors with the exception of SQSAA and SQSPA. In 3T3-L1 differentiated adipocytes, SASPA was the only analog that significantly (p < 0.05) reduced and prevented lipid accumulation and did not induce cytotoxicity to differentiated 3T3-L1 cells. All peptides, especially SASPA scavenged methylglyoxal and peroxyl radicals thereby preventing advanced glycosylated end products formation and oxidative stress. The nitric oxide scavenging activity of all peptides was comparable to IPI and glutathione. Findings indicate that the amide side chain of Q2 is probably the most critical functional group for modulating the multifunctional antidiabetic effects of SQSPA while SASPA has been identified, as a novel peptide with enhanced multifunctional antidiabetic activity.