LAF237 [(S)-1-[(3-hydroxy-1-adamantyl)ammo]acetyl-2-cyanopyrrolidine] is an inhibitor of dipeptidyl peptidase IV that delays the degradation of glucagon-like peptide-1 (GLP-1). Valsartan [N-(1-oxopentyl)-N-[[2′-(1H-tetrazol-5-yl)[1,1′-biphenyl]-4-yl]methyl]-l-valine] is an antagonist of the angiotensin II type 1 receptor (AT1R) that reduces the incidence of type 2 diabetes mellitus. LAF237 and valsartan act on a common target through separate pathways to improve pancreatic islet cell function. We hypothesize that the combination of these two drugs acts in a synergistic or additive manner on islet function and structure. To test this hypothesis, we performed in vitro and in vivo studies. To measure the acute effect of the treatment, pancreatic islets of db/db mice were isolated and stimulated in vitro with glucose in the presence of valsartan (1 μM) and exendin-4 (100 nM), a GLP-1 receptor agonist. Combination treatment with valsartan and exendin-4 significantly enhanced glucose-stimulated insulin secretion from isolated islets. For studies of chronic effect, db/db mice received LAF237 (1 mg/kg/day) and/or valsartan (10 mg/kg/day). Islet cell reactive oxygen species (ROS), proliferation, apoptosis, fibrosis, β-cell area, and glucose homeostasis were evaluated after 8 weeks of treatment, which showed that combination treatment resulted in a significant increase in pancreatic islet β-cell area compared with monotherapy. This beneficial effect correlated with an increase in β-cell proliferation and a decrease in ROS-induced islet apoptosis and fibrosis. These in vitro and in vivo data indicate that combination treatment with LAF237 and valsartan has significant beneficial additive effects on pancreatic β-cell structure and function compared with their respective monotherapeutic effects.