In recent years, therapeutic peptides have garnered great interest in the pharmaceutical industry for the treatment of diabetes. Lactic acid bacteria (LAB) are an appealing vehicle for safe and convenient oral delivery of bioactive peptide and protein drugs. Exendin-4 (Exd4) is a glucagon-like protein-1 (GLP-1) receptor agonist that is considered an excellent therapeutic peptide drug for type 2 diabetes due to its longer-lasting bioactivity, resulting from resistance to dipeptidyl peptidase 4. We explored Lactococcus lactis with the nisin-controlled gene expression (NICE) system as an oral delivery system for recombinant (r) Exd4 peptide in situ. Heterologous expression and secretion of rExd4 by L. lactis NZ9000/pNZ8048-rExd4 were successful and efficient under the NICE system. In vitro treatment with rExd4 significantly enhanced insulin secretion of INS-1 cells and activated the PI3-K/AKT signal pathway with protein levels of AKT and p-AKT increasing 1.6- to 1.8-fold compared to negative controls, similar to the positive GLP-1 controls. INS-1 cells treated with rExd4 also showed enhanced proliferation and inhibited apoptosis, corresponding with the effects of the standard Exd4 and GLP-1 treatments. Our data suggest that the rExd4 secreted by L. lactis is a bioactive insulinotropic peptide and functional GLP-1 receptor agonist that enhances glucose-dependent insulin secretion and activates the PI3-K/AKT signal pathway; furthermore, it may be involved in improving proliferation and inhibiting apoptosis of INS-1 cells in in vitro treatments. Therefore, L. lactis producing rExd4 may potentially serve as a novel strategy for oral treatment of diabetes.