Background: Dipeptidyl peptidase-4 (DPP-4) inhibitors have emerged as anti-hyperglycemic agents that improve glycemic control in type 2 diabetic patients, either as monotherapy or in combination with other antidiabetic drugs. Methods: A novel series of dihydropyrimidine phthalimide hybrids was synthesized and evaluated for their in vitro and in vivo DPP-4 inhibition activity and selectivity using alogliptin as reference. Oral glucose tolerance test was assessed in type 2 diabetic rats after chronic treatment with the synthesized hybrids ± metformin. Cytotoxicity and antioxidant assays were performed. Additionally, molecular docking study with DPP-4 and structure activity relationship of the novel hybrids were also studied. Results: Among the synthesized hybrids, 10g, 10i, 10e, 10d and 10b had stronger in vitro DPP-4 inhibitory activity than alogliptin. Moreover, an in vivo DPP-4 inhibition assay revealed that 10g and 10i have the strongest and the most extended blood DPP-4 inhibitory activity compared to alogliptin. In type 2 diabetic rats, hybrids 10g, 10i and 10e exhibited better glycemic control than alogliptin, an effect that further supported by metformin combination. Finally, 10j, 10e, 10h and 10d had the highest radical scavenging activity in DPPH assay. Conclusions: Hybrids 10g, 10i and 10e are potent DPP-4 inhibitors which may be beneficial for T2DM treatment.