Oxytocin (OXT) has been shown to suppress appetite, induce weight loss, improve glycemic control and lipid metabolism in several species including humans, monkeys and rodents. However, OXT’s short half-life in circulation and lack of receptor selectivity limit its application and efficacy. Here we report an OXT peptide analogue (OXTGly) that is potent and selective for the oxytocin receptor (OXTR). OXT, but not OXTGly, activated vasopressin receptors in vitro and acutely increased blood pressure in vivo when administered i.p.. OXT suppressed food intake in mice, while OXTGly had a moderate effect on food intake when administered i.p. or i.c.v.. Both OXT (i.p.) and OXTGly (i.p.) improved glycemic control in glucose tolerance tests. In addition, both OXT (i.p.) and OXTGly (i.p.) stimulated insulin, glucagon-like peptide 1 (GLP-1) and glucagon secretion in mice. We generated lipid conjugated OXT (acylated-OXT) and OXTGly (acylated-OXTGly) and demonstrated that these molecules have significantly extended half-lives in vivo. Compared to OXT, two-week treatment of diet induced obese (DIO) mice with acylated-OXT (s.c.) resulted in enhanced body weight reduction, an improved lipid profile, and gene expression changes consistent with increased lipolysis and decreased gluconeogenesis. Treatment with acylated-OXTGly (s.c.) also resulted in a statistically significant weight loss, albeit to a lesser degree compared to acylated-OXT treatment. In conclusion, we demonstrate that selective activation of the OXTR pathway results in both acute and chronic metabolic benefits, while potential activation of vasopressin receptors by non-selective OXT analogues causes physiological stress that contributes to additional weight loss.