A series of thiouracil derivatives were designed, synthesized and screened for in vitro inhibition of dipeptidyl peptidase IV. The SAR study indicated the influence of substituted chemical modifications on thiouracil scaffold. Compounds 8 (IC50 = 0.32 μm), 9 (IC50 = 0.29 μm), and 12 (IC50 = 0.25 μm) showed excellent dipeptidyl peptidase IV inhibition having heterocyclic substituted piperazine with acetamide linker resulted as most potent dipeptidyl peptidase IV inhibitors among all the compounds screened. Single dose (10 mg/kg) of the compounds 8, 9, and 12 significantly reduced glucose excursion during oral glucose tolerance test in streptozotocin‐induced diabetic rat model. The present study on substituted thiouracil derivatives shows good‐to‐moderate inhibitory potential of dipeptidyl peptidase IV enzyme.