The effect of peptide tyrosine–tyrosine (PYY) on feeding is well established but currently its role in glucose homeostasis is poorly defined. Here we show in mice, that intraperitoneal (ip) injection of PYY3-36 or Y2R agonist improves nutrient-stimulated glucose tolerance and enhances insulin secretion; an effect blocked by peripheral, but not central, Y2R antagonist administration. Studies on isolated mouse islets revealed no direct effect of PYY3-36 on insulin secretion. Bariatric surgery in mice, enterogastric anastomosis (EGA), improved glucose tolerance in wild-type mice and increased circulating PYY and active GLP-1. In contrast, in Pyy-null mice, post-operative glucose tolerance and active GLP-1 levels were similar in EGA and sham-operated groups. PYY3-36 ip increased hepato-portal active GLP-1 plasma levels, an effect blocked by ip Y2R antagonist. Collectively, these data suggest that PYY3-36 therefore acting via peripheral Y2R increases hepato-portal active GLP-1 plasma levels and improves nutrient-stimulated glucose tolerance.