BR103354 is a novel fibroblast activation protein (FAP) inhibitor with anti-diabetic and anti-steatotic effects. BR103354 inhibited FAP with an IC50 value of 14 nM, showing high selectivity against dipeptidyl peptidase (DPP)-related enzymes and prolyl oligopeptidase (PREP). BR103354 exhibited good pharmacokinetic properties as evidenced by oral bioavailability of 48.4% and minimal hERG inhibition. Single co-administration of BR103354 with hFGF21 reduced nonfasting blood glucose concentrations, in association with increased intact form of hFGF21 in ob/ob mice. BR103354 acts as an effective FAP inhibitor in vitro and in vivo, thereby demonstrating its potential application as an anti-diabetic and anti-NASH agent.