The initial focus on characterizing novel pyrazolo[1,5-a]pyrimidin-7(4H)-one derivatives as DPP-4 inhibitors, led to a potent and selective inhibitor compound b2. This ligand exhibits potent in vitro DPP-4 inhibitory activity (IC50: 80 nM), while maintaining other key cellular parameters such as high selectivity, low cytotoxicity and good cell viability. Subsequent optimization of b2 based on docking analysis and structure-based drug design knowledge resulted in d1. Compound d1 has nearly 2-fold increase of inhibitory activity (IC50: 49 nM) and over 1000-fold selectivity against DPP-8 and DPP-9. Further in vivo IPGTT assays showed that compound b2 effectively reduce glucose excursion by 34% at the dose of 10 mg/kg in diabetic mice. Herein we report the optimization and design of a potent and highly selective series of pyrazolo[1,5-a]pyrimidin-7(4H)-one DPP-4 inhibitors.