Protein transduction domains (PTDs), also known as cell-penetrating peptides (CPPs), have been developed as effective systems for delivering bio-active cargos such as proteins, genes and particles. Further improvements on cell-specific targeting, intracellular organelle targeting and intracellular retention are still necessary to enhance the therapeutic effect of PTD fusion proteins. In order to enhance the cell transduction and retention of anti-oxidative metallothionein protein (MT), MT was recombinantly fused with transcriptional activator (Tat) with or without a short peptide (sMTS) derived from mitochondria malate dehydrogenase (mMDH). Cellular uptake and retention time of fusion protein were significantly increased in the H9c2 cell by sMTS. The Tat-sMTS-MT (TMM) fusion protein protected H9c2 cells more effectively against hypoxia, hyperglycemia and combination compared with Tat-MT (TM) by reducing intracellular ROS level. It maintained the normal blood glucose level over an extended period of time in a streptozotocin-induced diabetic mouse model. PTD-sMTS-MT fusion protein has a potential to be used as a therapeutic protein for the treatment or prevention of diabetes and diabetic complications.